Question: Google Inc., is a global technology company that has been an innovative leader in Web search. Its balance sheet on December 31, 2011, included the

Google Inc., is a global technology company that has been an innovative leader in Web search. Its balance sheet on December 31, 2011, included the following data ($ in millions):

Accounts receivable, net of allowance of $133......$5,427

1. The company uses the allowance method for accounting for bad debts. The company added $214 million to the allowance during the year ending December 31, 2011. Write-offs of uncollectible accounts were $182 million. Show

(a) The impact on the balance sheet equation of these transactions,

(b) The journal entries.

2. Calculate the allowance balance on December 31, 2010.

3. Suppose Google had used the specific write-off method for accounting for bad debts. By using the same information as in requirement 1, show

(a) The impact on the balance sheet equation,

(b) The journal entry.

4. How would these Google balance sheet amounts on December 31, 2011, have been affected if the specific write-off method had been used up to that date? Be specific.

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