Daimler AG is a globally leading producer of premium passenger cars and the largest manufacturer of commercial vehicles in the world. Its group of businesses includes Mercedes-Benz Cars, Daimler Trucks, Daimler Financial Services, Mercedes-Benz Vans, and Daimler Buses. In a recent annual report, it disclosed the following information concerning its allowance for doubtful accounts:

Required:
1. Record summary journal entries related to bad debts for the current year. Ignore the currency translations and other changes.
2. If Daimler had written off an additional \(€ 10\) million of trade receivables during the period, how would net receivables and profit have been affected? Explain.

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Allowances. Changes in the allowance account for receivables from financial service were as follows: in millions of 2009 2008 2007 Balance at January 1 934 594 924 Charged to costs and expenses 850 712 457 Amounts writton off (445) (237) (321) Reversals (165) (131) (153) Disposal of Chrysler activities (310) Currency translation and other changes (5) (4) (3) Balance at December 31 1,168 934 594 Source: Daimler AG Annual Report 2009.