Question

Entries for Uncollectible Receivables, using Allowance Method

Journalize the following transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables:

May 24   Sold merchandise on account to Old Town Cafe, $16,700. The cost of goods sold was $12,000.
Sept. 30   Received $4,500 from Old Town Cafe and wrote off the remainder owed on the sale of May 24 as uncollectible.
Dec. 7   Reinstated the account of Old Town Cafe that had been written off on September 30 and received $12,200 cash in full payment.

If an amount box does not require an entry, leave it blank.

May 24-sale  


May 24-cost  


Sept. 30  



Dec. 7-reinstate  


Dec. 7-collection  

Answer 1

Date	General Journal	Debit	Credit
24-May	Accounts Receivable	$16,700
	Sales Revenue		$16,700
	(To record sales on account)
24-May	Cost of Goods Sold	$12,000
	Inventory Account		$12,000
	(To record cost of goods sold)
30-Sep	Cash	$4,500
	Allowance for Doubtful Account	$12,200
	Accounts Receivable		$16,700
	(To record collection of payment on account and balance wrote off)
7-Dec	Accounts Receivable	$12,200
	Allowance for Doubtful Account		$12,200
	(To reinstate the written of account)
7-Dec	Cash	$12,200
	Accounts Receivable		$12,200
	(To record cash collection)