Assume that Dome Company had the following balances in its receivable accounts on December 31, 2002:
|
Accounts receivable |
$400,000 |
|
|
Allowance for bad debts |
10,200 (credit balance) |
|
|
Transactions during 2003 were as follows: |
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|
Gross credit sales. |
$1,600,000 |
|
|
Collections of accounts receivable ($1,560,000 less cash discounts |
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of $20,000) |
1,540,000 |
|
|
Sales returns and allowances (from credit sales) |
10,000 |
|
|
Accounts receivable written off as uncollectible |
6,000 |
|
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Balance in Allowance for Bad Debts on December 31, 2003 |
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(based on percent of total accounts receivable) |
12,000 |
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Required
1. Prepare entries for the 2003 transactions.
2. What amount will Dome Company report for:
a. Net sales in its 2003 income statement?
b. Total accounts receivable on its balance sheet of December 31, 2003?