Question

Apr.	2.	Sold merchandise on account to Peking Palace Co., $36,010. The cost of the merchandise sold was $22,050.
June	9.	Received $11,500 from Peking Palace Co. and wrote off the remainder owed on the sale of April 2 as uncollectible.
Oct.	31.	Reinstated the account of Peking Palace Co. that had been written off on June 9 and received $24,510 cash in full payment.

Journalize the above transactions in the accounts of Dining Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

A)

	DEBIT	Credit
Accounts Receivable	36,010
Sales Revenue		36,010
	(To record Sales of Merchandise)

	DEBIT	Credit
Cost of Sales	22,050
Inventory		22,050
	(To record Reduce in inventory)

B)

	DEBIT	Credit
CASH	11,500
Allowance for uncollectible	24,510	36,010
Accounts Receivable
	(To record Receipt of cash and write of remaining balance)

C)

	DEBIT	Credit
Accounts Receivable	24,510
Allowance for uncollectible		24,510
	(To record reinstatement of previously written off item.)

	DEBIT	Credit
Cash	24,510
Accounts Receivable		24,510
	(To record Receipt of Cash)