At January 1, 2025, University Clothing had Accounts Receivable of $34,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, University Clothing recorded the following transactions for January: 

a. Sales of $189,000 ($165,000 on account; $24,000 for cash). Ignore Cost of Goods Sold. 

b. Collections on account, $133,000. 

c. Write-offs of uncollectible receivables, $2,800.

Requirements 

1. Journalize University Clothing’s transactions that occurred during January. The company uses the allowance method. 

2. Post University Clothing’s transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. 

3. Journalize University Clothing’s adjustment to record bad debts expense assuming University Clothing estimates bad debts as 1% of credit sales on January 31, 2025. Post the adjustment to the appropriate T-accounts. 

4. Show how University Clothing will report net accounts receivable on its January 31, 2025, balance sheet.