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Sunderland Company commenced business operations on January 1, 2017. During its first two years of...

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Accounting

Sunderland Company commenced business operations on January 1, 2017. During its first two years of operations, the company completed transactions involving sales on credit, accounts receivable collections, and bad debts. On December 31, 2017, its Accounts Receivable account and Allowance for Doubtful Accounts account had a balance of $2,090,000 and $37,620 respectively. The transactions for 2018 are summarized as follows. a. Sold $2,845,000 of merchandise (that had cost $1,730,000) on credit, terms n/30. b. Wrote off $95,300 of uncollectible accounts receivable. c. Received $1,825,200 cash from accounts receivable. d. Recovered and collected $10,000 which had previously been written off as uncollectible accounts receivable. e. In adjusting the accounts on December 31, the company estimated that 1.6% of accounts receivable will be uncollectible. Required Prepare journal entries to record Sunderlands 2018 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system. Round amounts to the nearest dollar.)

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