Question

TORII LU LILCI IL es the direct write-off DIRECT WRITE-OFF METHOD Lee and Chen Distributors uses the direct method in accounting for uncollectible accounts. 20-1 Feb. 16 Sold merchandise on account to Biggs and Daughters, $16,000. Mar. 23 Sold merchandise on account to Lloyd Place, $12,800. June 8 Received $12,000 from Biggs and Daughters and wrote off the remain der owed on the sale of February 16 as uncollectible. Sept. 27 Received $7,000 from Lloyd Place and wrote off the remainder owed on the sale of March 23 as uncollectible. Nov. 18 Reinstated the account of Biggs and Daughters, which had been written off on June 8, and received $4,000 cash in full settlement. 20-2 Jan. 11 Reinstated the account of Lloyd Place, which had been written off on September 27 of the previous year, and received $5,800 cash in full settlement.

Answer 1

	Date	Account titles & Explanations					Debit	Credit
	16-Feb	Accounts receivable					16,000
		Sales						16,000
	23-Mar	Accounts receivable					12,800
		Sales						12,800
	8-Jun	Cash					12,000
		Bad debts					4,000
		Account receivable						16,000
	27-Sep	Cash					7,000
		Bad debts					5,800
		Account receivable						12,800
	18-Nov	Accounts receivable					4,000
		bad debts expense						4,000
		cash					4,000
		Accounts receivable						4,000
	11-Jan	Accounts receivable					5,800
		bad debts expense						5,800
		cash					5,800
		Accounts receivable						5,800