Question

At December 31, 2017, Duffy Dog Imports Inc. reported this information on its balance sheet $633,000 Accounts receivable 42,000 Less: Allowance for doubtful accounts During 2018, the company had the following summary transactions related to receivables and sales. Duffy Dog uses the perpetual inventorysystem. Sales on account amounted to $2,485,000. The cost of the inventory sold was $2,261,350. 1 Sales returns and allowances with a total sales price of $42,000 and a cost of $38,220 were restored to inventory. 2. Collections of accounts receivable were $2,165,000. 3. Write-offs of accounts receivable deemed uncollectible, $46,600. 4 Recovery of bad debts previously written off as uncollectible, $14,400. 5.

Answer 1

No	Account titles					Debit	Credit
1	Accounts receivable					2485000
	Sales revenue						2485000
	(To record sale)
	Cost of goods sold					2261350
	Merchandise inventory						2261350
	(To record cost of the merchandise sold)
2	Sales returns and allowances					42000
	Accounts receivable						42000
	To record sales returns and allowances)
	Merchandise inventory					38220
	Cost of goods sold						38220
	(To record cost of sales on returns)
3	Cash					2165000
	Accounts receivable						2165000
	(Accounts receivable collected)
4	Allowance for doubtful accounts					46600
	Accounts receivable						46600
	(To record write-off)
5	Accounts receivable					14400
	Allowance for doubtful accounts						14400
	(To reverse write-off of accounts receivable)
	Cash					14400
	Accounts receivable						14400
	(To record recovery of uncollectble amount)
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