At December 31, 2018, House Co. reported the following information on its balance sheet.
|Less: Allowance for doubtful accounts||80,000|
During 2019, the company had the following transactions related to receivables.
|1||Sales on account||$3,700,000|
|2||Sales returns and allowances||50,000|
|3||Collections of accounts receivable||2,810,000|
|4||Write-offs of accounts receivable deemed noncollectable||90,000|
|5||Recovery of bad debts previously written off as noncollectable||29,000|
- Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.
- Enter the January 1,2019, balances in Accounts Receivable and Allowances for Doubtful Accounts, post the entries to the tow accounts (use T-accounts), and determine the balances.
- Prepare the journal entry to record bad dbt expense for 2019, assuming that an aging of accounts receivable indicates that expected bad debts are $115,000.
- Compute the accounts receivable turnover for 2019 assuming the expected bad debt information provided in (c).