The 2014 audit of Lane Company's accounting records discloses the following information:

Required:
1. Next Level Reconstruct the journal entries that were made by Lane during 2014 to record changes in the following accounts, assuming sales returns and allowances are estimated in the period of sale and the net price method is used to account for sales discounts.
a. Allowance for Doubtful Accounts
b. Allowance for Sales Returns and Allowances
c. Accounts Receivable
2. What is the 2014 ending balance in each of the accounts in Requirement 1, and how will it be reported on Lane's 2014 financial statements?

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2013 2014 Accounts receivable (ending) Allowance for doubtful accounts (ending) Allowance for sales returns and allowances (ending) Gross sales retums and allowances (estimated for the year) Accounts receivable written off during the year Estimated bad debts for the year Actual gross sales retums and allowances for the year Sales discounts not taken at end of year Credit sales during the year (terms, 2/10, n/60) Cash collected on accounts receivable during the year (net of $186,000 7,400 4,700 4,900 6,800 7,200 4,700 $177,520 7,000 3,916 5,200 7,900 7,500 6,000 400 380,000 367,500 375,000 352,000 discounts taken)