Assume that Dominum Company had the following balances in its receivable accounts on December 31, 2011:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $640,000
Allowance for bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,600 (credit balance)
Transactions during 2012 were as follows:
Gross credit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,100,000
Collections of accounts receivable
($1,840,000 less cash discounts of $32,000) . . . . . . . . . . . . . . . . . 1,808,000
Sales returns and allowances (from credit sales) . . . . . . . . . . . . . . 24,000
Accounts receivable written off as uncollectible . . . . . . . . . . . . . . 9,400
Balance in Allowance for Bad Debts on December 31, 2012
(based on percent of total accounts receivable) . . . . . . . . . . . . . . . 21,800
Required:
1. Prepare entries for the 2012 transactions.
2. What amount will Dominum Company report for:
a. Net sales on its 2012 income statement?
b. Total accounts receivable on its balance sheet of December 31, 2012?