PB8-2 (Algo) Interpreting Disclosure of Allowance for Doubtful Accounts (LO 8-2] EzScanner Corporation is the company that made the photocopier popular, but since then has grown a new business related to business process outsourcing. It recently disclosed the following information concerning the Allowance for Doubtful Accounts on its Form 10-K annual report. Year 2018 2017 2016 Allowance for Doubtful Accounts (dollars in millions) Increases for Bad Decreases for Beginning Balance Debt Expense Write-offs $ 60 $ 15 $ 18 65 17 75 b 26 Ending Balance $ 57 a 60 65 Required: 1-a. Prepare a T-account for the Allowance for Doubtful Accounts and enter into it the 2018 amounts from the above schedule. The balance at the beginning of each year in the Allowance for Doubtful Accounts is a credit balance. 1-b. Write the T-account in equation format to prove that the above items account for the changes in the account. 2. Record summary journal entries for 2018 related to (1) estimating bad debt expense and (i) writing off specific balances. 3. Supply the missing information for 2017 and 2016. 4. If EzScanner had written off an additional $21 (thousand) of accounts receivable during the period, by how much would Net Receivables have decreased? How much would Net Income have decreased? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req3 Req 4A Prepare a T-account for the Allowance for Doubtful Accounts and enter into it the 2018 amounts from the above schedule. The balance at the beginning of each year in the Allowance for Doubtful Accounts is a credit balance. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Allowance for Doubtful Accounts Credit Debit Beginning Balance Ending Balance Req 1A Reg 1B Reg 2 Req3 Req 4A Write the T-account in equation format to prove that the above items account for the changes in the account. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Beginning Balance + Ending Balance $ 0 Req 1A Reg 1B Reg 2 Req3 Req 4A Record summary journal entries for 2018 related to (1) estimating bad debt expense and (ii) writing off specific balances. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet 1 2 Record the adjusting entry for bad debts for 2018. Note: Enter debits before credits. General Journal Debit Credit Transaction i Req 1A Req 1B Req 2 Req3 Req 4A Record summary journal entries for 2018 related to (1) estimating bad debt expense and (ii) writing off specific balances. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet 1 N N Record the adjusting entry for write-off of specific customer balances for 2018. Note: Enter debits before credits. General Journal Debit Credit Transaction ii Req 1A Reg 1B Req 2 Reg 3 Req 4A Supply the missing information for 2017 and 2016. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Allowance for Doubtful Accounts Balance at Beginning of Year Additions Charged to Bad Debt Expense $ 17 Deductions From Allowance Balance at End of Year 2017 $ 65 $ 60 2016 75 26 65 Req 1A Reg 1B Req 2 Req3 Req 4A If EzScanner had written off an additional $21 of accounts receivable during 2016, by how much would its Net Accounts Receivable have decreased? How much would the write-off have decreased Income from Operations? Net Receivables Net Income
