Problem
At December 31, 2022 Blue Spruce Corp reported this information on its balance sheet
Accounts Receivable $518,000
Less: Allowance for doubtful accounts $38,500
During 2022, the company had the following transactions related to reeivables
Sales on account $2,350,000
Slaes returns and allowance $55,000
Collection of accounts receivable $2,050,000
Write offs of accounts receivable deemed uncollectible $45,000
Recovery of accounts previously written off as uncollectible $14,00
Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.
Enter the January 1, 2022 balances in Accounts Receivable and Allowance for Doubtful Accounts post the entries to the two accounts (use T accounts) and determine the balances.
Prepare the journal entry to record bad debt expenses for 2022 assuming that aging the accounts receivable indicates that estimated uncollectibles are $50,000