Question

Class: Date ACCT 230 Spring 2020 Chapter 6 Part Ilin-Class Handout 1. The following journal entries would be used in one of the two methods of accounting for uncollectible receivables. Identify each. (a) 900 900 Bad Debt Expense Accounts Receivable Billings (b) Allowance for Doubtful Accounts Accounts Receivable Grover 900 00 2. Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables Feb. 20 Received $1,000 from Andrew Warren and wrote off the remainder owed of $4,000 as uncollectible. May 10 Reinstated the account of Andrew Warren and received $4,000 cash in full payment. 3. Journalize the following transactions using the allowance method of accounting for uncollectible receivables. Apr. 1 Sold merchandise on account to Jim Dobbs, S7,200. The cost of the merchandise is $5,400. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment.

Answer 1

1) A) Direct write off method is used in this case

B) Allowance method is used in this case.

2)

Date	Particulars	Dr ($)	Cr ($)
Feb 20	Cash	1,000
	Bad debt expenses	4,000
	Account receivable		5,000
May 10	Account receivable	4,000
	Bad debt expenses		4,000
May 10	Cash	4,000
	Account receivable		4,000

3)

Date	Particulars	Dr ( $)	Cr ($)
April 01	Account receivable	7,200
	Sales		7,200
June 10	Cash	2,400
	Allowance for doubtful accounts	4,800
	Account receivable		7,200
Oct 11	Account receivable	4,800
	Allowance for doubtful accounts		4,800
Oct 11	Cash	4,800
	Account receivable		4,800