Potter Ltd. began operations in January 2019. On December 31, 2019, the end of its first year of operations, the balance in the companys Accounts Receivable account was $ 140,000. All of the companys sales are made on account, and during 2019, 80% of the total credit sales were collected and no accounts were written off as uncollectible. Management estimated that 2% of the credit sales would be uncollectible. During the following year, 2020, Potter had sales totalling $ 938,000. It collected 75% of these sales, together with 95% of the outstanding receivables from 2019. During 2020, the company wrote off $ 19,300 of receivables from customers whose accounts were determined to be uncollectible. During the year, the company also recovered $ 3,000 from customers whose accounts had previously been written off. (Note that this amount was not included in the collection figures given above.) The company estimated its bad debts expense to be 2.5% of its credit sales.

Prepare the necessary journal entries for recording all the preceding transactions in the accounting system of Potter Ltd. for 2019 and 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
2019	Enter an account title to record credit sales.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to record credit sales.	Enter a debit amount.	Enter a credit amount.
	(To record credit sales)
	Enter an account title to record cash collected from customers.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to record cash collected from customers.	Enter a debit amount.	Enter a credit amount.
	(To record cash collected from customers)
	Enter an account title to recognize the bad debts expense.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to recognize the bad debts expense.	Enter a debit amount.	Enter a credit amount.
	(To recognize the bad debts expense)
2020	Enter an account title to record credit sales.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to record credit sales.	Enter a debit amount.	Enter a credit amount.
	(To record credit sales)
	Enter an account title to record cash collected from customers.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to record cash collected from customers.	Enter a debit amount.	Enter a credit amount.
	(To record cash collected from customers)
	Enter an account title to write off accounts judged uncollectible.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to write off accounts judged uncollectible.	Enter a debit amount.	Enter a credit amount.
	(To write off accounts judged uncollectible)
	Enter an account title to reinstate an account that was previously written off.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to reinstate an account that was previously written off.	Enter a debit amount.	Enter a credit amount.
	(To reinstate an account that was previously written off)
	Enter an account title to record subsequent collection of accounts that were previously written off.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to record subsequent collection of accounts that were previously written off.	Enter a debit amount.	Enter a credit amount.
	(To record subsequent collection of accounts that were previously written off)
	Enter an account title to recognize the bad debts expense.	Enter a debit amount.	Enter a credit amount.
	Enter an account title to recognize the bad debts expense.	Enter a debit amount.	Enter a credit amount.
	(To recognize the bad debts expense)

eTextbook and Media

List of Accounts

Show the accounts receivable section of the statement of financial position at December 31, 2020.

Potter Ltd. Statement of financial position Choose the accounting period. December 31, 2020For the Month Ended December 31, 2020For the Year Ended December 31, 2020
Enter a balance sheet item.		$ Enter a dollar amount.
Enter a balance sheet item.		Enter a dollar amount.
Accounts Receivable, Net		$ Enter a total amount for this section.

eTextbook and Media

List of Accounts