Question

In: Accounting

The following information is taken from the 2010 annual report to shareholders of Hewlett-Packard (HP) Co.

The following information is taken from the 2010 annual report to shareholders of Hewlett-Packard (HP) Co.

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Required:

 a/ What is the balance in HP's allowance for doubtful accounts at the end of the fiscal years 2010 and 2009, respectively?

b/ What kind of account is the provision for doubtful accounts in HP's financial statements? (Note: Provision for doubtful accounts is synonymous with bad debt expense; that is, the charge against income for estimated uncollectible accounts from credit sales in that period) 

c/ Using a T-account for the allowance for doubtful accounts, identify the amounts written off during the year 2010.

Solutions

Expert Solution

a) Balance for Prov for Bad & doubtful Debt = Gross A/C Receivable - Net A/C Receivable

For yr ended 20009:- 17166-16537=629

For yr 2010:- 19006-18481 = 525

b) provision for doubtful debts is a liability Account in financial statements.

c) Bad debts w/off during the year 2010:

DrProv for Doubtful Allowance for year 2010cr
ParticularsAmtParticularsAmt


Opening Bal c/f629
Bad debts w/off(b/f)260Provision booked during the year156
Closing bal525

Total785Total785


ekkarill92 answered 2 years ago
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