Question

At December 31, 2017, Uli Imports Inc. reported this information on its balance sheet. Accounts receivable Less: Allowance for doubtful accounts $610,000 42,000 During 2018, the company had the following summary transactions related to receivables and sales. Uli uses the perpetual inventory system. 1. Sales on account amounted to $2,520,000. The cost of the inventory sold was $1,990,800. 2. Sales returns and allowances with a total sales price of $38,000 and a cost of $30,020 were restored to inventory. 3. Collections of accounts receivable were $2,244,000. 4. Write-offs of accounts receivable deemed uncollectible, $46,900. 5. Recovery of bad debts previously written off as uncollectible, $15,000.

Answer 1

c
Account Titles and Explanation	Debit	Credit
Bad Debts expense	35700		=45800-10100
Allowance for Doubtful Accounts		35700
Workings:
Allowance for Doubtful Accounts, beginning	42000
Add: Recovery of bad debts	15000
Less: Accounts written off	-46900
Allowance for Doubtful Accounts balance	10100