What is the ending balance in each of the accounts

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Problem - Reconstructing Accounts Receivable and Expense Journal Entries - The 2020 audit of Lane Company's accounting records discloses the following information:

 

2019

2020

Accounts receivable (ending)

$186,000


Allowance for doubtful accounts (ending)

7,400

7,000

Accounts receivable written off during the year

6,800

7,900

Estimated bad debts for the year

7,200

7,500

Actual gross sales returns and allowances for the year

4,700

6,000

Sales discounts not taken at end of year

0

400

Credit sales during the year (terms, 2/10, n/60)

375,000

380,000

Cash collected on accounts receivable during the year (net of discounts taken)

352,000

367,500

Required -

1. Reconstruct the journal entries that were made by Lane during 2020 to record changes in the following accounts, assuming sales returns and allowances are estimated in the period of sale and the net price method is used to account for sales discounts.

a. Allowance for Doubtful Accounts

b. Accounts Receivable

2. What is the 2020 ending balance in each of the accounts in Requirement 1, and how will it be reported on Lane's 2020 financial statements?

Reference no: EM132882131

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