OBERMEYER

At December 31, 2019, Obermeyer Imports reported the following information on its balance sheet.

Accounts receivable $250,000

Less: Allowance for doubtful accounts 10,000

During 2020, the company had the following transactions related to receivables.

1. Sales on account $2,500,000

2. Sales returns and allowances 55,000

3. Bad debt expense, 1% of net sales calculate

4. Collections of accounts receivable 1,800,000

5 Write-offs of accounts receivable deemed uncollectible 25,000.

6. Recovery of bad debts previously written off as uncollectible 3,000

7. The CPA did an analysis of the accounts. The allowance for bad debts should be:

• 20% for $20,000 of accounts over 60 days
• 10% for $100,000 of accounts over 30 days
• 2% for remaining accounts

Instructions

Prepare the journal entries to record each of these seven transactions. Assume that no cash discounts were taken on the collections of accounts receivable.