At December 31, 2007, Curtis Imports reported this information on its balance related to bad debt expense, sheet.

and compute ratios.

(SO 2, 3, 8) Accounts receivable $600,000 Cae Less: Allowance for doubtful accounts 40,000 During 2008 the company had the following transactions related to receivables. 1. Sales on account $2,600,000 2. Sales returns and allowances 40,000 3. Collections of accounts receivable 2,200,000 4. Write-offs of accounts receivable deemed uncollectible 45,000 5. Recovery of bad debts previously written off as uncollectible 18,000 Instructions

(a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.

(b) A/R bal. $915,000

(b) Enter the January 1, 2008, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T accounts), and determine the balances.

(c) Prepare the journal entry to record bad debts expense for 2008, assuming that aging the accounts receivable indicates that estimated bad debts are $46,000.

(d) Compute the receivables turnover ratio and average collection period.