Interpreting the Accounts receivable Footnote Hewlett-Packard Company (HPQ) reports the following in its 2010 10-K report. October 31 (in millions) 2010 2009 Accounts receivable, net $18,481 $16,537 HPQ footnotes to its 10-K provide the following additional information relating to its allowance for doubtful accounts. For the fiscal years ended October 31 (in millions) 2010 2009 2008 Allowance for doubtful accounts-accounts receivable Balance, beginning of period $ 629 $ 553 $ 226 Increase in allowance from acquisition 7 -- 245 Addition of bad debts provision 80 282 226 Deductions, net of recoveries (191) (206) (144) Balance, end of period $ 525 $ 629 $ 553 (a) What is the gross amount of accounts receivables for HPQ in fiscal 2010 and 2009? ($ millions) 2010 2009 Gross accounts receivable Answer 19,006 Answer 17,166 (b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2010 and 2009? (Round your answers to two decimal places.) ($ millions) 2010 2009 Percentage of uncollectible accounts to gross accounts receivable Answer 2.76 Answer 3.66 (c)What amount of bad debts expense did HPQ report each year 2008 through 2010? What amount was actually written off? ($ millions) 2010 2009 2008 Bad debt expense Answer 80 Answer 282 Answer 226 Amount actually written off Answer 191 Answer 206 Answer 144 Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off? Generally, HP has overestimated its accruals, which has inflated profit by the over-accrual of bad debts. Generally, HP has underestimated its accruals, which has inflated profit by the under-accrual of bad debts. The difference between bad debt expense and write-off during the three years is small, so it appears they are accurately accruing for anticipated credit losses. The difference between bad debt expense and write-off during the three years has inflated HPQ's cash flows reported. (d)Compute HPQ's write-offs as a percentage of the allowance account at the beginning of the year (Round your answers to two decimal places). 2010 write-offs as a percentage of beginning of year allowance: Answer 3.03 % 2009 write-offs as a percentage of beginning of year allowance: Answer 3.72 %