Recording Entries to Adjust the Allowance for Doubtful Accounts

Steelcase, Inc., reported the following amounts in its 2020 and 2019 10-K reports (years ended February 28, 2020, and February 22, 2019).

($ millions)	2020	2019
From the income statement:
Revenue	$8,936.9	$8,263.7
From the balance sheet:
Accounts receivable, net	893.8	936.7
Customer deposits	68.6	48
From the disclosure on allowance for doubtful accounts:
Balance at beginning of period	20.8	26.6
Additions (reductions) charged to income	17.5	13.2
Adjustments or deductions	(15.8)	(19.0)
Balance at end of period	22.5	20.8

Note: Enter answers in $ millions.

a. Prepare the journal entry to record accounts receivable written off as uncollectible in 2020.

	Account	Debit	Credit
	Accounts receivableAllowance for doubtful accountsBad debts expenseCashSales revenueUnearned revenue		Answer
	Accounts receivableAllowance for doubtful accountsBad debts expenseCashSales revenueUnearned revenue		Answer
	To record accounts receivable write offs.

b. Prepare the entry to record the provision for doubtful accounts (bad debts expense) for 2020.

	Account	Debit	Credit
	Accounts receivableAllowance for doubtful accountsBad debts expenseCashSales revenueUnearned revenue		Answer
	Accounts receivableAllowance for doubtful accountsBad debts expenseCashSales revenueUnearned revenue		Answer
	To record bad debts expense.

c. What effect did these entries have on Steelcases income for that year?

Steelcase's report income Answerdecreasedincreased

by $Answer

million as a result of these entries.