The following items were extracted from the 2012 financial records of Cummins Inc. (dollars in millions): Allowance

Question:

The following items were extracted from the 2012 financial records of Cummins Inc. (dollars in millions):
Allowance for doubtful accounts 12 (cr.)
During the following year, the company wrote off $5 of as uncollectible and then estimated $6 of the year’s receivables to be uncollectible. The company did not recover any previously written-off accounts.
a. Prepare the entry to record the bad debt expense.
b. Compute the final balance in allowance for doubtful accounts.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...