Refer to Amazon 10-K for the year 2020.
Record summary journal entries related to the allowance for doubtful accounts for the current year!
What was the effect of bad debt expense entry on “Income before income taxes?” What was the effect on “Net cash provided by operating activities?”
What was the effect of the write-off entry on “Income before income taxes?” What was the effect on “Net cash provided by operating activities?”
Did bad debt expense as a percentage of Net revenues increase or decrease from 2019 to 2020?
Did management disclose any information indicating the reason for the increase or decrease?
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Assume that all of Amazon’s sales to customers are on account. Its 10-K indicates that $1 billion bad (trade) accounts receivable were written-off in 2020 and there were no reinstatements. Bad debt expense for the period were recorded by debiting “General and Administrative Expenses” and crediting the “Allowance for doubtful accounts.” What amount of bad debt expense was recorded in 2020?
Assuming all sales revenues were on account, what were collections on accounts receivable during 2020?