Question

At December 31, 2021, Ivanhoe Imports reported this information on its balance sheet.

Accounts receivable		$615,000
Less: Allowance for doubtful accounts		35,000

During 2022, the company had the following transactions related to receivables.

1.		Sales on account		$3,020,000
2.		Sales returns and allowances		50,000
3.		Collections of accounts receivable		2,720,000
4.		Write-offs of accounts receivable deemed uncollectible		45,000
5.		Recovery of bad debts previously written off as uncollectible		21,000

(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.)

Answer 1

solution:

S.no.	Particulars	Debit	Credit
1	Accounts Receivable Dr	$30,20,000
	To Sales revenue		$30,20,000
2	Sales Returns and allownaces Dr	$50,000
	To Accounts receivable		$50,000
3	Cash Dr	$27,20,000
	To Accounts receivable		$27,20,000
4	Allowance for Doubtful Accounts Dr	$45,000
	To Accounts Receivable		$45,000
5	Accounts Receivable Dr	$21,000
	To Allowance for Doubtful Accounts		$21,000
	Cash Dr	$21,000
	To Accounts Receivable		$21,000