At January 1, 2012, Bordeaux Inc. reported the following information on its statement of financial position:
Accounts receivable..................................$480,000
Allowance for doubtful accounts.....................35,000
During 2012, the company had the following summary transactions for receivables:
1. Sales on account, $1,600,000
2. Sales returns and allowances, $250,000
3. Collections of accounts receivable, $1,500,000
4. Interest added to overdue accounts, $125,000
5. Write-offs of accounts receivable deemed uncollectible, $45,000
6. Recovery of accounts previously written off as uncollectible, $10,500
Instructions
(a) Prepare the journal entries to record each of the summary transactions.
(b) Enter the January 1 balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts, and determine the balances.
(c) Prepare the journal entry to record bad debts expense at December 31, assuming that aging the accounts receivable indicates that the amount for estimated uncollectible accounts is $55,000.
(d) Determine the net realizable value of the accounts receivable as at December 31.
(e) Show the statement of financial position presentation of the receivables as at December 31.
(f) Show the income statement presentation of any income statement accounts for the year ended December 31.