NOTE G – SUPPLEMENTAL BALANCE SHEET INFORMATION

Components of selected captions in our accompanying unaudited condensed consolidated balance sheets are as follows:

Trade accounts receivable, net



	As of
(in millions)	September 30, 2017			December 31, 2016
Accounts receivable	$	1,580		$	1,579
Less: allowance for doubtful accounts	(81		)	(73		)
Less: allowance for sales returns	(29		)	(34		)
	$	1,470		$	1,472

The following is a rollforward of our allowance for doubtful accounts:



	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2017			2016			2017			2016
Beginning balance	$	74		$	80		$	73		$	75
Net charges to expenses	9			(1		)	14			5
Utilization of allowances	(2		)	(4		)	(6		)	(5		)
Ending balance	$	81		$	75		$	81		$	75

Inventories



	As of
(in millions)	September 30, 2017		December 31, 2016
Finished goods	$	674	$	625
Work-in-process	108		94
Raw materials	295		236
	$	1,077	$	955

Other current assets



	As of
(in millions)	September 30, 2017		December 31, 2016
Prepaid expenses	$	72	$	58
Restricted cash	449		243
Other	124		240
	$	645	$	541

Property, plant and equipment, net



	As of
(in millions)	September 30, 2017		December 31, 2016
Land	$	93	$	91
Buildings and improvements	1,056		981
Equipment, furniture and fixtures	3,139		2,955
Capital in progress	297		338
	4,585		4,365
Less: accumulated depreciation	2,907		2,735
	$	1,678	$	1,630

Depreciation expense was $71 million for the third quarter of 2017, $67 million for the third quarter of 2016, $198 million for the first nine months of 2017 and $193 million for the first nine months of 2016.

Accrued expenses



	As of
(in millions)	September 30, 2017		December 31, 2016
Legal reserves	$	1,355	$	1,062
Payroll and related liabilities	560		572
Accrued contingent consideration	28		63
Other	608		615
	$	2,551	$	2,312

Other long-term liabilities



	As of
(in millions)	September 30, 2017		December 31, 2016
Accrued income taxes	$	842	$	781
Legal reserves	335		961
Accrued contingent consideration	53		141
Other	508		455
	$	1,738	$	2,338

Accrued warranties

We offer warranties on certain of our product offerings. The majority of our warranty liability relates to implantable devices offered by our Cardiac Rhythm Management (CRM) business, which include defibrillator and pacemaker systems. Our CRM products come with a standard limited warranty covering the replacement of these devices. We offer a full warranty for a portion of the period post-implant and a partial warranty for a period of time thereafter. We estimate the costs that we may incur under our warranty programs based on the number of units sold, historical and anticipated rates of warranty claims and cost per claim and record a liability equal to these estimated costs as cost of products sold at the time the product sale occurs. We reassess the adequacy of our recorded warranty liabilities on a quarterly basis and adjust these amounts as necessary. The current portion of our warranty accrual is included in other accrued expenses in the table above and the non-current portion of our warranty accrual is included in other long-term liabilities in the table above. Changes in our product warranty accrual consisted of the following:



	Nine Months Ended September 30,
(in millions)	2017			2016
Beginning Balance	$	22		$	23
Provision	20			16
Settlements/reversals	(18		)	(19		)
Ending Balance	$	24		$	20