Question
Briar Patch Company provided the following disclosure note relating to its accounts receivable Allowance for doubtful accounts. the allowance for doubtful accounts reflects our best
Briar Patch Company provided the following disclosure note relating to its accounts receivable
Allowance for doubtful accounts. the allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available data. Activity in the allowance for doubtful accounts is presented as follows (in millions):
Year ended June 30 | balance at beg of period | charged to cost and expenses | write-offs | balance at the end of the period |
Two years ago | $500 | $173 | $(89) | $584 |
prior year | 584 | 6 | (86) | 504 |
Current year | 504 | 24 | (77) | 452 |
1) Calculate Briar Patch Company's accounts receivable turnover for the current year. Briar Patch had sales revenue of $104,915 million in the current year. Prior year accounts receivable, net and current year accounts receivable, net are $17,486 and $19,544, respectively.
2) Reconstruct the summary journal entries and prepare a summary T-account for the current year based on the information in the disclosure note.
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