Reference no: EM133140815
Question - Sarasota Corp.'s balance sheet at December 31, 2016, included the following.
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Note receivable
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$720,000
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Interest receivable
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28,000
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Accounts receivable
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1,385,000
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Less: Allowance for doubtful accounts receivable
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94,000
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1,291,000
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$2,039,000
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The following occurred in 2017.
1. Sarasota made sales of $10,580,000. All sales were credit sales. Sarasota allows some discounts for early payment of receivables and uses the gross method to record sales.
2. Customer accounts of $88,750 were written off during the year.
3. Accounts receivable of $10,680,000 were collected. Collections for the year included $300,000 of accounts on which 2% sales discounts were allowed.
4. $12,000 was received in payment of an account which was written off the books as worthless in 2016.
5. At year-end (December 31, 2017), Sarasota estimated that its Allowance for Doubtful Accounts needed a balance of $75,000. This estimate is based on an analysis of aged accounts receivable.
6. The note receivable and related interest were due January 1, 2017. Young collected both, in full, on that date.
Required - Prepare all journal entries necessary to reflect the transactions.