Interpreting Bad Debt Disclosures Siemens is one of the worlds largest electrical engineering and electronics companies. Headquartered

Question:

Interpreting Bad Debt Disclosures
Siemens is one of the world€™s largest electrical engineering and electronics companies. Headquartered in Germany, the company has been in business for over 160 years and operates in 190 countries. In a recent annual report, it disclosed the following information concerning its allowance for doubtful accounts (euros in millions denoted as ‚¬):

Charged to Costs and Expenses €271 Balance at End of Period Balance at Beginning of Period Amounts Written Off €(153

Required:
1. Record summary journal entries related to the allowance for doubtful accounts for the current year.
2. If Siemens had written off an additional ‚¬10 million of accounts receivable during the period, how would receivables, net, and net income have been affected? Explain why.

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...