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, $10,000. The cost of goods sold was $7,200.

Sept. 30 Received $2,700 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 $7,300 cash in full payment.

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

May 24- sale Accounts Receivable-Old Town Café

Sales   

May 24-cost    Cost of Goods Sold

Inventory   

Sept. 30    Cash

   Allowance for Doubtful Accounts

Accounts Receivable-Old Town Cafe

Dec. 7-reinstate Accounts Receivable-Old Town Cafe

   Allowance for Doubtful Accounts

Dec. 7-collection Cash

   Accounts Receivable-Old Town Cafe

Answer 1

Journal entries

Date	General Journal	Debit	Credit
May 24	Account receivable-Old Town Cafe	10000
	Sales		10000
May 24	Cost of goods sold	7200
	Inventory		7200
Sept 30	Cash	2700
	Allowance for doubtful accounts	7300
	Account receivable-Old town cafe		10000
Dec 7	Account receivable-Old Town Cafe	7300
	Allowance for doubtful accounts		7300
	Cash	7300
	Account receivable-Old Town Cafe		7300