Question

The Nestlé Group disclosed the following analysis of its trade receivables at December 31, 2012 (amounts in millions of Swiss francs, CHF):
Aged Trade Receivables Amount
Not past due ............. 10,925
Past due 1– 30 days ........... 1,356
Past due 31– 60 days ........... 445
Past due 61– 90 days ........... 168
Past due 91– 120 days .......... 95
Past due more than 120 days ........ 798
13,787
Assume that the estimated percentages of uncollectible accounts were determined as 1 percent, 5 percent, 10 percent, 20 percent, 30 percent, and 40 percent for the six age groups, respectively. At January 1, 2012, the allowance for doubtful accounts had a balance of CHF372, and a total of CHF95 was written off as uncollectible during 2012. The company recovered CHF15 from customers whose accounts were written off in 2011.
Required:
1. Prepare the journal entries to record the receivables that were written off in 2012, the recovery of receivables written off in 2011, and the bad debt expense for 2012.
2. Show how the information related to trade receivables is presented on the company’s statement of financial position as at December 31, 2012.


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  • CreatedAugust 04, 2015
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