Reference no: EM132723740

Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end.

The 2020 balance sheet disclosed the following:

Current assets:

• Receivables, net of allowance for uncollectible accounts of $35,000 $457,000
• During 2021, credit sales were $1,775,000, cash collections from customers $1,855,000, and $40,000 in accounts receivable were written off. In addition, $3,500 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:

Percentage of Year-End       Percent Age Group     Receivables in Group Uncollectible

0-60 days                                   65%                             4%

61-90 days                                15                                    10

91-120 days                                 15                                   30

Over 120 days                                5                                         50

Required:

Problem 1. Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off.