Answer:
<u>journal entries for 2017:</u>
Dr Accounts receivable 1,347,100
Cr Sales revenue 1,347,100
Dr Cost of goods sold 983,600
Cr Merchandise inventory 983,600
Dr Bad debt expense 21,100
Cr Accounts receivable 21,100
Dr Cash 667,400
Cr Accounts receivable 667,400
Dr Bad debt expense 16,465
Cr Allowance for doubtful accounts 16,465
Ending balance of accounts receivable = $658,600
Ending balance of allowance for doubtful accounts = $16,465
Bad debt expense for the year = $37,565
<u>journal entries for 2018:</u>
Dr Accounts receivable 1,501,200
Cr Sales revenue 1,501,200
Dr Cost of goods sold 1,291,000
Cr Merchandise inventory 1,291,000
Dr Allowance for doubtful accounts 28,100
Cr Accounts receivable 28,100
Dr Cash 1,282,100
Cr Accounts receivable 1,282,100
Dr Bad debt expense (= 21,240 + 11,635) 32,875
Cr Allowance for doubtful accounts 32,875
Ending balance of accounts receivable = $849,600
Ending balance of allowance for doubtful accounts = $21,240
Bad debt expense for the year = $32,875
