1. Given the above information from IBMs annual report, what percent of notes and accounts receivable-trade did IBM plan on not collecting at the end of 2016?

2. How does that compare to 2015?

3. If the auditor for IBM insisted that IBM increase their allowance to 5% of gross notes and accounts receivable, what journal entry would be needed?

4. With the journal entry above what would happen to the current ratio - go up or go down or stay the same

5. With the journal entry above what would happen to return on investment for 2016 go up or go down or stay the same?

($ in millions except pershare amounts) For they ear ended December 31, Notes 2016 2015 Revenue Services $51,268 $49,911 Sales 26942 29,967 Financing 1,710 1,864 Total revenue 79919 81,741 cost Services 34,021 33,126 sales 6,559 6,920 Financing Total cost 1,044 1,011 41.625 41,057 Gross profit 38,294 40,684 Expense and other (income) Selling, general and administrative 21,069 20,430 Research, development and engineering 5,751 5,247 Intellectual property and custom development income other (income) and expense Interest expense Total expense and other (income) Income from continuing operations before income taxes Provision for income taxes (1,6321) (682) (724) D8 630 25,964 24,740 12,330 449 15,945 2,581 Income from continuing operations Loss from discontinued operations, net of tax Net income 11881 13,364 (9) (174). $11,872 $13,190