At December 31, 2019, Obermeyer Imports reported the following information on its balance sheet. Accounts receivable $250,000
Less: Allowance for doubtful accounts 15,000
During 2019, the company had the following transactions related to receivables.
1. Sales on account $2,600,000
2. Sales returns and allowances 45,000
3. Collections of accounts receivable 2,250,000
4. Write-offs of accounts receivable deemed uncollectible 10,000
5. Recovery of bad debts previously written off as uncollectible 3,000
Instructions
(a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable.

(b) Enter the January 1, 2019, balances in Accounts Receivable and Allowance for Doubtful Accounts. Post the entries to the two accounts (use T-accounts), and determine the balances.

(c) Prepare the journal entry to record bad debt expense for 2019, assuming that an aging of accounts receivable indicates that estimated bad debts are $22,000.

The journal entries to record each of the transactions will be:

Debit Accounts Receivable $2,600,000

Credit Sales Revenue $2,600,000

(To record the sale of goods on account)

Debit Sales Returns $45,000

Credit Accounts Receivable $45,000

(To record the return of goods on account).

Debit Cash Account $2,250,000

Credit Accounts Receivable $2,250,000

(To record collections from customers)

Debit Uncollectible Expenses $10,000

Credit Accounts Receivable $10,000

(To record the write-off of accounts deemed uncollectible).

Debit Cash Account $3,000

Credit Uncollectible Expenses $3,000

(To record the recovery of bad debts previously written off)

The balances in accounts receivable and allowance for doubtful accounts will be calculated thus:

Debit Beginning balance $250000.

Debit sales revenue $2,600,000.

Credit Sales return $45000

Credit Cash account $2250000

Credit Uncollectible expenses $10000

Credit ending balances $545000

Lastly, the journal entry to record bad debt expense for 2019 will be:

Debit Uncollectible expense $7000.

Credit Allowance for doubtful accounts $7000.

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Obermeyer Imports

a) Journal Entries to record each transaction:

1. Debit Accounts Receivable $2,600,000

Credit Sales Revenue $2,600,000

To record the sale of goods on account.

2. Debit Sales Returns $45,000

Credit Accounts Receivable $45,000

To record the return of goods on account.

3. Debit Cash Account $2,250,000

Credit Accounts Receivable $2,250,000

To record collections from customers.

4. Debit Uncollectible Expenses $10,000

Credit Accounts Receivable $10,000

To record the write-off of accounts deemed uncollectible.

5. Debit Cash Account $3,000

Credit Uncollectible Expenses $3,000

To record the recovery of bad debts previously written off.

b) T-accounts:

Accounts Receivable

Accounts Titles            Debit          Credit

Beginning balances $250,000

Sales Revenue        2,600,000

Sales Returns                                    45,000

Cash Account                              2,250,000

Uncollectible Expenses                     10,000

Ending Balances                             545,000

Total                     $2,850,000 $2,850,000

Allowance for doubtful accounts

Accounts Titles            Debit          Credit

Beginning balances                    $15,000

Uncollectible expense                    7,000

Ending balances       $22,000

c) Journal Entry

Debit Uncollectible Expense $7,000

Credit Allowance for doubtful accounts $7,000

To record the allowance for uncollectibles.

Explanation:

a) Data and Calculations:

Accounts receivable $250,000

Less: Allowance for doubtful accounts 15,000

b) The allowance for Doubtful Accounts will increase by $7,000 to $22,000.  As a result, the Uncollectible Expense will be debited with $7,000 while the Allowance for doubtful accounts will be credited with $7,000.  This brings the total of Allowance for Doubtful Accounts to $22,000 in accordance with the new estimate based on the aging of accounts receivable.

answer; risk transference;

answer; by looking at total product,marginal product,and changes in both after changes in inputs