At December 31, 2018, Tamarisk, Inc. reported the following information on its balance sheet. Accounts receivable $967,000 Less: Allowance for doubtful accounts 75,000 During 2019, the company had the following transactions related to receivables. 1. Sales on account $3,951,880 2. Sales returns and allowances 55,000 3. Collections of accounts receivable 2,820,000 4. Write-offs of accounts receivable deemed uncollectible 95,000 5. Recovery of bad debts previously written off as uncollectible 28,000
1. Prepare the journal entires to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.
2. Enter the January 1, 2017, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T-accounts), and determine the balances.
3. Prepare the journal entry to record bad debt expense for 2017, assuming that an aging of accounts receivable indicates that expected bad debts are $115,000.
4. Compute the accounts receivable turnover for 2017, assuming the expected bad debt information provided in 3.