Question

Name 10. Using the allowance method, prepare the journal entries for the following using proper form: March 2. Sold merchandise on account to Kline Co., $29,000. The cost of the merchandise sold was $17,500. May 5. Received $7,500 from Kline Co. and wrote off the remainder owed on the sale of March 2 as uncollectible October 15. Reinstated the account of Kline Co. that had been written off on May 5 and received $21,500 cash in full payment.

Answer 1

	JOURNAL
		Date	Description	Post. Ref.	Debit	Credit
	1	02-Mar	Account Recievable Account Dr.		29000
			To Sales Account			29000
			(Being Credit Sales recorded)
	2	05-May	Cash Account Dr.	02-Mar	7500
			To Account Reievable Account			7500
			(Being Collection made)
	3	05-May	Allowance for Doubtful Account Dr.	02-Mar	21500
			To Account Reievable Account			21500
			(Being Bad Debt recorded)
	4	15-Oct	Account Recievable Account Dr.	05-May	21500
			To Allowance for Doubtful Account			21500
			(Being reinstatement of AR made)
	5	15-Oct	Cash Account Dr.	15-Oct	21500
			To Account Reievable Account			21500
			(Being Collection made)