Assume that Dominum Company had the following balances in its receivable accounts on December 31, 2011: Accounts

Question:

Assume that Dominum Company had the following balances in its receivable accounts on December 31, 2011:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $640,000

Allowance for bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,600 (credit balance)

Transactions during 2012 were as follows:

Gross credit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,100,000

Collections of accounts receivable

($1,840,000 less cash discounts of $32,000) . . . . . . . . . . . . . . . . . 1,808,000

Sales returns and allowances (from credit sales) . . . . . . . . . . . . . . 24,000

Accounts receivable written off as uncollectible . . . . . . . . . . . . . . 9,400

Balance in Allowance for Bad Debts on December 31, 2012

(based on percent of total accounts receivable) . . . . . . . . . . . . . . . 21,800

Required:

1. Prepare entries for the 2012 transactions.

2. What amount will Dominum Company report for:

a. Net sales on its 2012 income statement?

b. Total accounts receivable on its balance sheet of December 31, 2012?

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