At December 31, 2017, Ridgewood Imports Inc. reported this information on its balance sheet. Accounts receivable Less: Allowance for doubtful accounts $595,000 41,000 During 2018, the company had the following summary transactions related to receivables and sales. Ridgewood uses the perpetual inventory system. 1. 2. 3. 4. 5. Sales on account amounted to $2,414,000. The cost of the inventory sold was $1,979,480. Sales returns and allowances with a total sales price of $41,000 and a cost of $33,620 were restored to inventory. Collections of accounts receivable were $2,091,000. Write-offs of accounts receivable deemed uncollectible, $46,500. Recovery of bad debts previously written off as uncollectible, $15,500. No. Account Titles and Explanation Debit Credit 1. (To record sales) (To record cost of the merchandise sold) 2. (To record sales returns and allowances) (To record cost of sales on sales returns) 3. 4. 5. (To reverse write-off of account receivable) (To record recovery of uncollectible amount)