From the notes of the 2007 annual report for Harley-Davidson, Inc., we find the following information relating
Question:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $27,283
Provision for finance credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,252
Charge-offs, net of recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,240)
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,295
Instructions:
1. What do the terms provision and charge-offs represent?
2. Reconstruct the journal entries that resulted in the above changes in Allowance for Bad Debts.
3. Why do you think there is such a difference between the amount being expensed for the period and the amount being written off?
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Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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