Question

Eli Lilly, a major pharmaceutical company, includes the following in its December 31, 2011, balance sheet ($ amounts in millions):
Accounts receivable, net of allowances of $110.1......$3,597.7
1. Compute the ratio of the allowance for doubtful items to gross accounts receivable for December 31, 2011. In 2009, this ratio was 3.4%. What are some possible reasons for the changes in this ratio?
2. Independent of the actual balances, prepare a journal entry to write off an uncollectible account of $210,000 on January 2, 2011.



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  • CreatedFebruary 20, 2015
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