1. On December 31, 2016, the balance in Accounts Receivable for XYZ Co. is $40 million. The balance in the Allowance for Doubtful Debts account is $4 million. During 2017, the company had credit sales of $300 million and collected $244 million from its customers. Also during 2017, customers who collectively owed the company $8 million informed the company that they will be unable to pay. The company wrote off these receivables as uncollectible.

1. Assume that the company estimates that 5% of all credit sales will eventually be uncollected. Show how ABC will account for doubtful debts in 2017. Also show how accounts receivable will be shown on XYZs December 31, 2017 Balance Sheet.

B. Assume that the company uses the aging method to account for doubtful debts. The distribution of the age of the accounts receivable of XYZ as of December 31, 2017 is as follows:

	Age of Receivables
	< 45 days	46-90 days	91-180 days	> 180 days
Amount	$45 m	$26 m	$13 m	$4 m
% of receivables estimated to be uncollectible	4%	10%	20%	50%

Show all doubtful debts related accounting for 2017. Also show how accounts receivable will be shown on XYZs December 31, 2017 Balance Sheet.