Question

At December 31, 2017, Oak Ridge Imports Inc. reported this information on its balance sheet. Accounts receivable Less: Allowance for doubtful accounts $549,000 40,000 During 2018, the company had the following summary transactions related to receivables and sales. Oak Ridge uses the perpetual inventory system. 1. Sales on account amounted to $2,277,000. The cost of the inventory sold was $1,935,450. 2. Sales returns and allowances with a total sales price of $37,000 and a cost of $31,450 were restored to inventory. 3. Collections of accounts receivable were $1,953,000. 4. Write-offs of accounts receivable deemed uncollectible, $44,700. 5. Recovery of bad debts previously written off as uncollectible, $14,100.

Answer 1

		Account receivable
	Beg Bal	549,000	2)	37,000
	1)	2,277,000	3)	1,953,000
	5)	14,100	4)	44,700
			5)	14,100
	End bal	791,300
	Allowance for Doubtful Accounts
	4)	44,700	Beg Bal	40,000
			5)	14,100
			End bal	9,400