Question

Journalize the following transactions using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $7,410. The cost of the merchandise is $3,705. April 1 April 1 June 10 Received $2,470 from Jim Dobbs and wrote off the remainder owed of $4,940. If amount box does not require an entry, leave it blank or enter "O". June 10 Oct. 11 Reinstated the account of Jim Dobbs and received $4,940 cash in full payment. Oct. 11 Oct. 11

Answer 1

Date	Accounts titles and explanation	Debit	Credit
April 1	Accounts Receivable	$7,410
	...Sales		$7,410
	(To reciord the cerdit sales)
April 1	Cost of merchandise sold	$3,705
	...Merchandise Inventory		$3,705
	(To record the cost of goods sold)
June 10	Cash	$2,470
	.Allowance for doubtful accounts	$4,940
	...Accounts Receivable		$7,410
	(To record the cash collected and balance transfer to doubtful accounts)
Oct. 11	Accounts Receivable	$4,940
	...Allowance for doubtful accounts		$4,940
	(To record the Accounts Receivable)
Oct. 11	Cash	$4,940
	...Accounts Receivable		$4,940
	(To record the collection of cash)