The information given here was taken from Yahoo! Inc.€™s recent 10-K filed with the Securities & Exchange Commission (SEC). In groups, discuss the activity in the allowance for doubtful accounts during the past three years. How is the level of write-offs associated with the annual balance in the allowance? Does Yahoo! appear to have a sufficient balance each year in its allowance account?

Refer back to the balances in accounts receivable provided in Exhibit 4.5A on page 161 to help you figure out what€™s going on in the allowanceaccount.

Transcribed Image Text:

Years Ended December 31, 2006, 2007, and 2008 Balance at Beginning of Year Write-OffsBalance at End of Year Charged toNet of, Expenses Recoveries (in thousands) 41,857 5,070 (8,731) $38,196 Accounts receivable Allowance for doubtful accounts 2006 2007 2008 38,196 46,521 23,018 63) 46,521 14,693) 46,521 24,937 19,858 51,600