Requirements

1. The bank and cash section of the Balance Sheet shows a balance ofCHF 7,990 million as of December 31, 2016, and is made up of many different bank accounts, as well as time de posits, certificates of deposit, and perhaps government securities that are equivalent to cash. Suppose one of Nestle's year-end bank statements, dated December 31, 2016, has just arrived at company headquarters. Further assume the bank statement shows Nestle's cash balance at CHF 7,990 million and that Nestle's record for this bank account has a balance of CHF 8,070 million on the books. You must determine the correct balance for cash in this bank account onDecember 31, 2016. Suppose you uncover the following reconciling items (all amounts areassumed and are stated in millions):
   1. Interest earned on bank balance, CHF 10 million
   2. Outstanding checks, CHF 80 million
   3. Bank collections of various items, CHF 20 million
   4. Deposits in transit, CHF 30 million

Prepare a bank reconciliation to show how Nestle arrived at the correct amount of cash in thisbank account at December 31, 2016. Journal entries are not required.

2. Refer to the account in Nestle's Balance Sheet entitled "trade and other receivables." Thisamount is typically shown net of allowances for doubtful accounts. What does "net" mean?How does Nestle determine its allowance for doubtful accounts? Y
3. How much is the allowance for bad and doubtful accounts in 2016 and 2015? Assume that the allowance utilized in 2016 was CHF 100 million? Do the journal entries for the writing off ofuncollectible accounts and the allowance for bad debts in 2016.