DaimlerChrysler is the largest industrial group headquartered in Germany. Best known as the manufacturer of Mercedes-Benz and Chrysler cars and trucks, it also manufactures products in the fields of rail systems, aerospace, propulsion, defense, and information technology. In a recent filing pursuant to its listing on the New York Stock Exchange, it disclosed the following information concerning its allowance for doubtful accounts (in millions of German marks denoted DM):

Required: 1. Record summary journal entries related to bad debts for the current year. 2. If DaimlerChrysler had written off an additional DM1 million of accounts receivable during the period, how would receivables, net, and net income have been affected? Explain why.

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Balance at Beginning of Period 1,933 Charged to Costs and Expenses 92 Amounts Written Off (52) Balance at End of Period 1,973