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

(a)

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.)

No.	Account Titles and Explanation	Debit	Credit
1.	enter an account title to record the first transaction	enter a debit amount	enter a credit amount
	enter an account title to record the first transaction	enter a debit amount	enter a credit amount
2.	enter an account title to record the second transaction	enter a debit amount	enter a credit amount
	enter an account title to record the second transaction	enter a debit amount	enter a credit amount
3.	enter an account title to record the third transaction	enter a debit amount	enter a credit amount
	enter an account title to record the third transaction	enter a debit amount	enter a credit amount
4.	enter an account title to record the fourth transaction	enter a debit amount	enter a credit amount
	enter an account title to record the fourth transaction	enter a debit amount	enter a credit amount
5.	enter an account title to record the fifth transaction to reinstate account previously written off	enter a debit amount	enter a credit amount
	enter an account title to record the fifth transaction to reinstate account previously written off	enter a debit amount	enter a credit amount
	(To reinstate account previously written off)
	enter an account title to record the fifth transaction	enter a debit amount	enter a credit amount
	enter an account title to record the fifth transaction	enter a debit amount	enter a credit amount
	(To record collection of accounts receivable)

Answer 1

(a)

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.)

No.	Account Titles and Explanation	Debit	Credit
1.	Account receivable	2590000
	Sales revenue		2590000
2.	Sales return and allowance	55000
	Account receivable		55000
3.	Cash	2290000
	Account receivable		2290000
4.	Allowance for doubtful accounts	45000
	Account receivable		45000
5.	Account receivable	15000
	Allowance for doubtful accounts		15000
	(To reinstate account previously written off)
	Cash	15000
	Account receivable		15000
	(To record collection of accounts receivable)