Question

At December 31, 2021, Ivanhoe Imports reported this information on its balance sheet. Accounts receivable Less: Allowance for doubtful accounts $615,000 35,000 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 $3,020,000 50.000 2,720,000 45,000 21.000 (b) Enter the January 1, 2022, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts and determine the balances. (Post entries in the order of journal entries posted in the previous part) Accounts Receivable Allowance for Doubtful Accounts

Answer 1

• Requirement [b]

Accounts receivables
Beg Bal	$615,000	2. Sales return & Allowances	$50,000
1. Sale on account	$3,020,000	3. Collection of accounts receivables	$2,720,000
5. Recovery of bad debts previously written off	$21,000	4. Write offs	$45,000
		5. Recovery of bad debts previously written off	$21,000
End Bal	$820,000

>Accounts receivables balance is increased on DEBIT side and decreased on CREDIT side.
>Transaction #5: Recovery can be eliminated from Accounts receivables account.

Allowance for Doubtful Accounts
4. Write offs	$45,000	Beg Bal	$35,000
		5. Recovery of bad debts previously written off	$21,000
		End Bal	$11,000