Required information SB Problem The following information is taken from the 2015

Question

Required information SB Problem The following information is taken from the 2015 annual report to shareholders of Hewlett-Packard (HP) Co. For Fiscal 2015 For Fiscal 2014 Provision for doubtful accounts $ 46 million $ 25 million At Fiscal Year-end 2015 At Fiscal Year-end 2014 Accounts receivable, net Accounts receivable, gross 13,363 million 13,552 million 13, 832 million 14,064 million Problem 7-159 For each posted entry in the allowance account during 2015, prepare the journal entry. (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).)

Explanation / Answer

1

Entry to record provision for doubtful accounts:

During 2015 46 million of provision was created as per the given details:

2

Allowance for doubtful accounts is the amount of difference between Accounts receivable gross and accounts receivable net.

For 2014 allowance for doubtful accounts = 14,064 -13,832 = 232

For 2015 allowance for doubtful accounts = 13,552 -13,363 = 189

From 2014 to 2015 an amount of 46 million of provision wad made, by doing so the balance would have come to 232 + 46 = 278 million. but the final balance is only 189 million this is because the difference between 278 - 189 = 89 million is the actual amount of accounts written off. Entry is

*Hope above explanation helps, please comment if further explanation is required. Your rating is appreciated*

Account Debit Credit Bad debt expense 46 Allowance for doubtful accounts 46 [Entry to record provision for doubtful accounts for the year]

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.