Question

Please help. Read the information.

May 24 Sold merchandise on account to Old Town Cafe $36,010. The cost of the goods sold was $22,050 Sept. 30 Received $11,500 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 $24,510 cash in full payment. Journalize the above transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Zippy Interiors Company General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-Old Town Cafe 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation Office Equipment LIABILITIES 210 Accounts Payable

Answer 1

Journal entries:

Journal					Accounting equation
Date	Account title and explanation	Debit	Credit		Assets	Liabilities	Equity
May 24	Accounts receivable-old town cafe	$36,010			$36,010
	Sales revenue		$36,010				$36,010
	[To record sales on account]
	Cost of goods sold	$22,050					($22,050)
	Inventory		$22,050		($22,050)
	[To record cost of goods sold]
Sept. 30	Cash	$11,500			$11,500
	Allowance for doubtful accounts	$24,510			$24,510
	Accounts receivable-old town cafe		$36,010		($36,010)
	[To record collection and write off of accounts receivable]
Dec.7	Accounts receivable-old town cafe	$24,510			$24,510
	Allowance for doubtful accounts		$24,510		($24,510)
	[To reinstate previously written off of uncollectible]
	Cash	$24,510			$24,510
	Accounts receivable-old town cafe		$24,510		($24,510)
	[To record collection from accounts receivable]