Question

1. 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, $17,900. The cost of goods sold was $12,900.
   Sept. 30	Received $3,600 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 $14,300 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

Check My Work

Answer 1

Date	General Journal	Debit	Credit
May 24- Sale	Accounts receivable - Old Town Cafe	$17,900
	Sales		$17,900
May 24- Cost	Cost of goods sold	$12,900
	Inventory		$12,900
September 30	Cash	$3,600
	Allowance for doubtful accounts	$14,300
	Accounts receivable - Old Town Cafe		$17,900
Dec -7, reinstate	Accounts receivable - Old Town Cafe	$14,300
	Allowance for doubtful accounts		$14,300
Dec. -7-Collection	Cash	$14,300
	Accounts receivable - Old Town Cafe		$14,300