Question

Could anyone explain this question to me? Thank you!

value: 11.11 points The Nestlé Group disclosed the following analysis of its accounts receivable at December 31, 2014 lamounts in millions of Swiss francs, CHF): Aged Accounts Receivable Not past due Past due 1-30 days Past due 31-60 days Past due 61-90 days Past due 91-120 days Past due more than 120 days Amount 11,801 851 254 108 60 737 13,811 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, 2014, the allowance for doubtful accounts had a balance of CHF377, and a total of CHF99 was written off as uncollectible during 2014. The company recovered CHF15 from customers whose accounts were writ in 2013 Required: 1. Prepare the journal entries to record the receivables that were written off in 2014, the recovery of receivables written off in 2013, and the bad debt expense for 2014. (Enter your answer in millions of Swiss francs. Round intermediate calculations and final answers to 1 decimal place. If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list

Answer 1

1.

Transaction	General Journal	Debit	Credit
1	Allowance for doubtful accounts	99.0
	Accounts receivable		99.0
	(To record write-off of uncollectible receivables)
2	Accounts receivable	15.0
	Allowance for doubtful accounts		15.0
	(To reinstate receivable earlier written off)
3	Cash	15.0
	Accounts receivable		15.0
	(To record collection on account)
4	Bad debt expense	227.4
	Allowance for doubtful accounts		227.4
	(To record estimated bad debt expense)

Working:

Age	Accounts Receivable	Percent Uncollectible	Amount Uncollectible
Not past due	11801	1%	118.01
1 - 30 days	851	5%	42.55
31 - 60 days	254	10%	25.40
61 - 90 days	108	20%	21.60
91 - 120 days	60	30%	18.00
Over 120 days	737	40%	294.80
Total	13811		520.36

Balance required in Allowance for doubtful accounts			520.36
Existing balance in Allowance for doubtful accounts			293.00
(CHF377 - 99 + 15)
Adjustment required			227.36

2.

Statement of financial position:
Current assets
Accounts receivable	CHF	13811.0
Less: Allowance for doubtful accounts		520.4
Accounts receivable, net	CHF	13290.6