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 $36,000 $ 462,000
During 2021, credit sales were $1,780,000, cash collections from customers $1,860,000, and $41,000 in accounts receivable were written off. In addition, $3,600 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 70% 5%
61-90 days 20 15
91-120 days 5 20
Over 120 days 5 40
Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off.
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