Balances January $1,$ current year

Accounts receivable $($various customers$)$

$$120,000$

Allowance for doubtful accounts

$8,000$

In the following order, except for cash sales, the company sold merchandise and made collections on credit terms $\frac{2}{10},$

$\frac{n}{30}($assume a unit sales price of $$500$ in all transactions$).$

Transactions during current year:

a$.$ Sold merchandise for cash, $$235,000.$

b$.$ Sold merchandise to R$.$ Smith; invoice price, $$11,500.$

c$.$ Sold merchandise to K$.$ Miller; invoice price, $$26,500.$

d$.$ Two days after purchase date, R$.$ Smith returned one of the units purchased in $(b)$ and received account credit.

e$.$ Sold merchandise to B$.$ Sears; invoice price, $$24,000.$

f$.$ R$.$ Smith paid his account in full within the discount period.

g$.$ Collected $$98,000$ cash from customer sales on credit in prior year, all within the discount periods.

h$.$ K$.$ Miller paid the invoice in $($c$)$ within the discount period.

i$.$ Sold merchandise to R$.$ Roy; invoice price, $$19,000.$

j$.$ Three days after paying the account in full, K$.$ Miller returned seven defective units and received a cash refund.

k$.$ After the discount period, collected $$6,000$ cash on an account receivable on sales in a prior year.

I. Wrote off a prior year account of $$3,000$ after deciding that the amount would never be collected.

$m.$ The estimated bad debt rate used by the company was $1\mathrm{.}5$ percent of credit sales net of returns.

Show how the accounts related to the preceding sale and collection activities should be reported on the current year income

statement.