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

Journal entries

No	Account title and explanation	Debit	Credit
a	Account receivable	2520000
	Sales revenue		2520000
	(To record sales)
	Cost of goods sold	1990800
	Merchandise inventory		1990800
	(To record cost of goods sold)
b	Sales return and allowance	38000
	Account receivable		38000
	(To record sales return)
	Merchandise inventory	30020
	Cost of goods sold		30020
	(To record cost of goods returned)
c	Cash	2244000
	Account receivable		2244000
	(To record collection)
d	Allowance for doubtful accounts	16900
	Account receivable		16900
	(To record write off)
e	Account receivable	15000
	Allowance for doubtful accounts		15000
	(To record reinstated)
	Cash	15000
	Account receivable		15000
	(To record collection)