Question

At December 31, 2021, Sheridan Imports reported this information on its balance sheet. Accounts receivable $594,000 Less: Allowance for doubtful accounts 38,000 During 2022, the company had the following transactions related to receivables. 1. Sales on account $2,590,000 2. Sales returns and allowances 55,000 3. Collections of accounts receivable 2,290,000 4. Write-offs of accounts receivable deemed uncollectible 45,000 5. Recovery of bad debts previously written off as uncollectible 15,000 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 manually.)

Answer 1

Step-by-step explanation:

The journal entries are shown below:

1. Accounts receivable A/c Dr $2,590,000

To Service revenue A/c $2,590,000

(Being service provided is recorded)

2. Sales return and allowance A/c Dr $55,000

To Accounts receivable $55,000

(Being sales return is recorded)

3. Cash A/c Dr $2,290,000

To Accounts receivable $2,290,000

(Being cash is received)

4. Allowance for Doubtful Accounts A/c Dr $45,000

To Accounts receivable $45,000

(Being uncollectible amount is written off)

5. Accounts receivable $15,000

To Allowance for Doubtful Accounts A/c Dr $15,00

(Being bad debts is recovered)

Cash A/c Dr $15,000

To Accounts receivable $15,000

(Being bad debts is recovered)