Question

Hello, I was able to solve part (a), (b), and (c), but I really need help with part (d) with both 2012 and 2011 write offs as a percentage. If anyone can help me solve these, I would appreciate it.

Interpreting the Accounts receivable Footnote

Hewlett-Packard Company (HPQ) reports the following in its 2012 10-K report.

HPQ footnotes to its 10-K provide the following additional information relating to its allowance for doubtful accounts.

(a) What is the gross amount of accounts receivables for HPQ in fiscal 2012 and 2011?

(b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2012 and 2011? (Round your answers to two decimal places.)

(c)What amount of bad debts expense did HPQ report each year 2010 through 2012 (ignore increase in allowance from acquisitions)? What amount was actually written off?

Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off?

The difference between bad debt expense and write-off during the three years has inflated HPQ's cash flows reported.

The difference between bad debt expense and write-off during the three years is insignificant so it appears that profit has been fairly stated.

Generally, HP has overestimated its accruals, which has deflated profit by the over-accrual of bad debts.

1.00 points out of 1.00

October 31

(in millions)

 

2012

 

2011

Accounts receivable, net

$16,407

$18,224

 

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