ACC $211$ EXAM III Fall $24$ Prof, Scerbinski

$4$ The Lily Company uses the percent of receivables method of accounting for uncollectible accounts receivable, and a perpetual inventory system. As of January $1,$ its Accounts Receivable is $$200,000$ and Allowance for Doubtful Accounts is $$8,000.$ During the current year, the following transactions occurred.

Merchandise costing $$1,050,000$ was sold on account for $$1,400,000.$

The company collected $$1,294,000$ from customers on account.

$$6,000$ of accounts receivable were deemed uncollectible and written off.

$$1,000$ of accounts receivable previously written off as uncollectible were recovered.

At year$-$end, Lily Company estimates that $4\%$ of its accounts receivable are uncollectible.

Prepare journal entries to record these transactions.