Reference no: EM133131040

Question - Links Ltd. has been in business for several years and has the following information for its operations which ended December 31, 2020:

1. Total sales for the year were $3,560,000, of which 60% were on account.

2. The company estimates bad debts to be 4.5% of credit sales.

3. Links Ltd. began the year with $650,000 in accounts receivable and a normal credit to the allowance for doubtful accounts of $68,000.

4. Links Ltd. writes off customer accounts that have been outstanding for more than 120 days. During the year, accounts with a carrying amount of $77,000 reached the 120-day mark and were written off.

5. The company uses a collection agency to try to collect accounts that have been written off. The collection agency was able to collect $22,000 from customers whose accounts had previously been written off.

6. During the year the company collected $1,820,000 of its accounts receivable.

Prepare a summary journal entry for the credit sales and journal entries to record the above transactions on the books of Links Ltd. on December 31, 2020.