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, $16,300. The cost of goods sold was $11,700, Sept. 30 Received $3,700 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 $12,600 cash in full payment. If an amount box does not require an entry, leave it blank. May 24-sale May 24-cost Sept. 30 Dec. 7.reinstate Dec. 7-collection

Answer 1

Date	Account Titles and Explanation	Debit	Credit
May 24 - sale	Account receivable	$16,300
	Sales revenue		$16,300
May 24 - cost	Cost of goods sold	$11,700
	Merchandise inventory		$11,700
Sep 30	Cash	$3,700
	Allowance for doubtful account	$12,600
	Account receivable		$16,300
Dec 7-reinstate	Account receivable	$12,600
	Allowance for doubtful accounts		$12,600
Dec 7-collection	Cash	$12,600
	Account receivable		$12,600