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At December 31, 2017, Oak Imports Inc. reported this information on its balance sheet. Accounts receivable $590,000 Less: Allowance for doubtful accounts 44,000 During 2018,
At December 31, 2017, Oak Imports Inc. reported this information on its balance sheet.
Accounts receivable | $590,000 | |
Less: Allowance for doubtful accounts | 44,000 |
During 2018, the company had the following summary transactions related to receivables and sales. Oak uses the perpetual inventory system.
1. | Sales on account amounted to $2,374,000. The cost of the inventory sold was $1,899,200. | |
2. | Sales returns and allowances with a total sales price of $43,000 and a cost of $34,400 were restored to inventory. | |
3. | Collections of accounts receivable were $2,091,000. | |
4. | Write-offs of accounts receivable deemed uncollectible, $49,300. | |
5. | Recovery of bad debts previously written off as uncollectible, $15,600. |
Prepare the journal entry to record bad debts expense for 2018, assuming that aging the accounts receivable indicates that estimated uncollectible accounts receivable are $42,900
Account Titles and Explanation Debit Credit
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