Problem

Recording Bad Debts and Interpreting Disclosure of Allowance for Doubtful Accounts (P6-4)U...

Recording Bad Debts and Interpreting Disclosure of Allowance for Doubtful Accounts (P6-4)

Under various registered brand names, Saucony, lnc., and its subsidiaries develop , manufacture, and market bicycles and component parts, athletic apparel, and athletic shoes . It recently disclosed the following information concerning the allowance for doubtful accounts on its Form 10-K Annual Report submitted to the Securities and Exchange Commission.

Schedule II

Valuation an d Qualifying Accounts

(dollars in thousands)

Allowances for

Doubtful Accounts

Balance at

Beginning

of Yea r

Additions

Charged to Costs

and Expenses

Deductions

from Reserve

Balance at

End of Year

Year 3

$1,108

$6,014

$5,941

(?)

Year 2

 

2.406

?

5,795

$1,108

Year 1

 

2,457

4,752

(?)

2,406

Required:

I. Record summary journal entries related to bad debts for year 3.

2. Supply the missing dollar amounts noted by (?) for year 1, year 2, and year 3

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