Microsoft Corporation

Balance Sheets (partial)

As of June 30

(in millions)

Current Assets 2014 2013

Cash and cash equivalents 8,669 3804

Short-term investments 77,040 73,218

Accounts receivable, net 19,544 17,486

Inventories 2,660 1,938

Other 6,333 5,020

Total Current Assets 114,246 101,466

Total Current Liabilites 45,625 37,417

Microsoft provided the following disclosure related 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 evidence. Activity in the allowance for doubtful accounts is as follows: (in millions)

Year Ended June 30 Balance at Beginning of Period Charged to costs and expenses Write-offs Balance at end of period

2012 333 115 (59) 389

2013 398 4 (57) 336

2014 336 16 (51) 301

(a) Compute Microsoft's accounts receivable turnover for 2014 and discuss your results. Microsoft had sales revenue of $69,943 million in 2014.

(b) Reconstruct the bad debt related journal entries for 2014 based on the information in the disclosure