Sherman Co. began operations on January 1, 2014, and completed several transactions during 2014 and 2015 that involved sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows.
2014
a. Sold $685,350 of merchandise (that had cost $500,000) on credit, terms ny30.
b. Received $482,300 cash in payment of accounts receivable.
c. Wrote off $9,350 of uncollectible accounts receivable.
d. In adjusting the accounts on December 31, the company estimated that 1% of accounts receivable will be uncollectible.
2015
e. Sold $870,220 of merchandise (that had cost $650,000) on credit, terms ny30.
f. Received $990,800 cash in payment of accounts receivable.
g. Wrote off $11,090 of uncollectible accounts receivable.
h. In adjusting the accounts on December 31, the company estimated that 1% of accounts receivable will be uncollectible.
Required
Prepare journal entries to record Sherman’s 2014 and 2015 summarized transactions and its year-end adjusting entry to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable. Round amounts to the nearest dollar.)