At December 31, 2013, Dustin Company reported this information on its balance sh

Question

At December 31, 2013, Dustin Company reported this information on its balance sheet.

Accounts receivable $960,000 Less: Allowance for doubtful accounts 78,000

During 2014, the company had the following transactions related to receivables.

1.Sales on account $3,600,000
2. Sales returns and allowances 150,000
3. Collections of accounts receivable 3,100,000
4. Write-offs of accounts receivable deemed uncollectible 92,000
5. Recovery of bad debts previously written off as uncollectible 28,000

Instructions0

Enter the January 1, 2014, balances in Accounts Receivable and Allowance for Doubt- ful Accounts, post the entries to the two accounts (use T-accounts), and determine the balances.

Explanation / Answer

DEBIT CREDIT

Accts Rec 3,200,000
Sales 3,200,000

Sales 50,000
Accts Rec 50,000

Bank 281,000
Accts Rec 281,000

Bad Debt 90,000
Accts Rec 90,000

Bank 24,000
Bad Debt 24,000

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