8.6.1

Swifty Corp's balance sheet at December 31, 2016, included the following. $660,000 36,000 Note receivable Interest receivable Accounts receivable Less: Allowance for doubtful accounts receivable 1,415,000 95,000 1,320,000 $2,016,000 The following occurred in 2017. 1. 2. 3. Swifty made sales of $10,540,000. All sales were credit sales. Swifty allows some discounts for early payment of receivables and uses the gross method to record sales. Customer accounts of $83,500 were written off during the year. Accounts receivable of $10,640,000 were collected. Collections for the year included $200,000 of accounts on which 1% sales discounts were allowed. $12,500 was received in payment of an account which was written off the books as worthless in 2016. At year-end (December 31, 2017), Swifty estimated that its Allowance for Doubtful Accounts needed a balance of $73,000. This estimate is based on an analysis of aged accounts receivable. The note receivable and related interest were due January 1, 2017. Young collected both, in full, on that date. 4. 5. 6. Prepare all journal entries necessary to reflect the transactions above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Debit Credit No. Account Titles and Explanation 1. 2. 3. 4. (To record entry to reinstate the accounts receivable) (To record the collection on account) 5. 6