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

WORKING NOTES:
	Allowance for Doubtfull Debts (Opening Bal.)	$                    40,000	Credit
	Provision for the Bad debts of the year 2018	$                    44,700	Credit
	Balance need to be provission for the year	$                      4,700	Credit
SOLUTION :	FOR RECORD OF BAD DEBTS
Journal Entries
Date	Account Title and explanation	Debit	Credit
------------	Bad Debt Expenses	$                      4,700
	To Allowance for Doubtful Debts		$                          4,700
	(Record the bad debt expenses of the year )
FOR WRITE OFF ACCOUNT RECEIVABLE BELOW ENTRY IS PASSES
Date	Account Title and explanation	Debit	Credit
------------	Allowance for Doubtful Debts	$                    44,700
	Account Receivable		$                       44,700
	(Record the write off account receivable)