The 2017 audit of Lane Company€™s accounting records discloses the following information:

Required:
1. Reconstruct the journal entries that were made by Lane during 2017 to record changes in the following accounts, assuming sales returns and allowances are estimated in the period of sale and the net price method is used to account for sales discounts.
a. Allowance for Doubtful Accounts
b. Accounts Receivable
2. What is the 2017 ending balance in each of the accounts in Requirement 1, and how will it be reported on Lane€™s 2017 financial statements?

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2016 2017 Accounts receivable (ending) Allowance for doubtful accounts (ending) Accounts receivable written off during the year Estimated bad debls for the year Actual gross sales returns and allowances for the year Sales discounts not laken at end of yean Credit sales during the year (terms, 2/10, n/60 Cash collected on accounls receivable during the year (net $186,000 $183,400 7,000 7,900 7,500 6,000 400 380,000 400 6,800 7,200 4,700 375,000 of discounts taken) 352,000 367,500