At december 31, 2018, martinez corp. imports reported this information on its balance sheet: accounts receivable $628,200 less: allowance for doubtful accounts 37,300 during 2019, the company had the following transactions related to receivables:
(1) sales on account $2,936,400
(2) sales returns and allowances 94,480
(3) collections of accounts receivable 2,528,500
(4) write-offs of accounts receivable deemed uncollectible 41,620
(5) recovery of bad debts previously written off as uncollectible 16,440

(a) prepare the journal entries for each of these five transactions.
(b) prepare the journal entry to record bad debt expense for 2019, assuming that estimated bad debts are 6% of total accounts receivable.

Martinez Corp journal S

Date

1. Receivable Dr 2,936400

Sales Cr. 2936400

Narration. Sales on account.

2.Saler. Dr. 94,480

Returns inwards Cr 94,480

Narration. Returns on good sold.

3. Bank Dr 2,528,500

Receivable Cr. 2,528,500

Narration. Receipt on receivables

4. Bad debt Dr 41,620

Receivable Cr 41,620

Narration. Posting of unrecoverable receivable.

5. Receivable Dr 16440

Bad debt Cr 16440

Narration. Bad debt previously written off now revovered.

B. Balance on receivables as at 2019

S

Balance b/f 628,200

Add sales2936400

Less returns 94480

Less receipt 2528500

Less bad debt 41620

Balance is 900,000

Estimate of bad debt is 6% of 900000

*54,000

Journal entry

Income statement Dr 16700

Allowance doubtful debt Cr 16700

Explanation:

The increase in allowance for provision for doubtful debt from S37300 to S54000 of S16700 is debited to income statement and the credit to the provision account to bring it to S54000

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