Question

At December 31, 2021, Oriole Imports reported this information on its balance sheet. Accounts receivable Less: Allowance for doubtful accounts $620,000 42,000 During 2022, the company had the following transactions related to receivables. 1 Sales on account 2. Sales returns and allowances 3. Collections of accounts receivable 4. Write-offs of accounts receivable deemed uncollectible 5. Recovery of bad debts previously written off as uncollectible $2,810,000 63,000 2,510,000 44,000 15,000 Your answer is correct. Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Omit cost of goods sold entries.) (Credit account titles are automatically indented when amount is entered. Do not indent manual No. Account Titles and Explanation Debit Credit Accounts Receivable 2810,000 Sales Revenue DO Sales Returns and Allowances

Answer 1

No	Account titles & Explanations					Debit	Credit
1	Account receivable					2,810,000
	Sales revenue						2,810,000
2	Sales return and allowance					63,000
	Account receivable						63,000
3	Cash					2,510,000
	Account receivable						2,510,000
4	Allowance for doubtful accounts					44,000
	Account receivable						44,000
5	Accounts receivable					15,000
	Allowance for doubtful accounts						15,000
	cash					15,000
	Accounts receivable						15,000
		Accounts receivable
	Bal	620,000	2)	63,000
	1)	2,810,000	3)	2,510,000
	5)	15,000	4)	44,000
			5)	15,000
	Bal	813,000
		Allowance for doubtful accounts
	4)	44,000	Bal	42,000
			5)	15,000
			Bal	13,000
	Account titles & Explanations					Debit	Credit
	Bad debts expense					38,000
	Allowance for doubtful accounts						38,000
	(51000-13000)