At December 31, 2005, Zurich Company reported this info on itsbalance sheet.
Accounts receivable $960,000
Less: Allowance for doubtful accounts $70,000
During 2006 the company had the following transactions related toreceivables.
1. Sales on account $3,800,000
2. Sales returns and allowances $50,000
3. Collections of accounts receivable $3,000,000
4. Write-offs of accounts receivable deemed uncollectible$90,000
5. Recovery of bad debts previously written off as uncollectible$40,000
Prepare the journal entry to record bad debts expense for 2005, assuming that aging the accounts receivable indicates that expected bad debts are $110,000.