Following is the current asset section from the W.W. Grainger, Inc., balance sheet.

Required

a. What amount do customers owe Grainger at each of the year-ends 2010 through 2012 ?

b. What percentage of its total accounts receivable does Grainger deem uncollectible? (Hint: Percentage of uncollectible accounts = Allowance for uncollectible accounts/Gross accounts receivable)

c. What amount of bad debts expense did Grainger report in its income statement for each of the years 2010 through 2012 ?

d. Explain the change in the balance of the allowance for uncollectible accounts since 2010 . Specifically, did the allowance increase or decrease as a percentage of gross accounts receivable, and why?

e. If Grainger had kept its 2012 allowance for uncollectible accounts at the same percentage of gross accounts receivable as it was in 2010 , by what amount would its pretax profit have changed? Explain.

f. Overall, what is your assessment of Grainger's allowance for uncollectible accounts and the related bad debts expense?

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As of December 31 ($ 000s) Cash and cash equivalents Accounts receivable (less allowances for doubtful accounts of $19,449, $18,801, respectively) Inventories-net... Prepaid expenses and other assets. Deferred income taxes.. Prepaid income taxes... Total current assets... ..... 2012 2011 2010 $452,063 $335,491 $313,454 940,020 888,697 1,301,935 1,268,647 110,414 100,081 55,967 40,241 47,410 54,574 $2,900,640 $2,694,900 $2,238,071 Grainger reports the following footnote relating to its receivables. 762,895 991,577 87,125 44,627 38,393 Allowance for Doubtful Accounts The following table shows the activity in the allowance for doubtful accounts. For Years Ended December 31 ($ 000s) Balance at beginning of period .... Provision for uncollectible accounts Write-off of uncollectible accounts, net of recoveries. Business acquisitions, foreign currency and other Balance at end of period.. 2012 $18,801 9,504 (9,100) 244 $19,449 2011 $24,552 2010 $25,850 4,761 6,718 (8,138) (8,302) (2,374) 286 $18,801 $24,552