Question

Using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $6,900. The cost of the merchandise is $2,760. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment. Required: Journalize the above transactions. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest dollar amount.

Answer 1

Answer and Explanation:

As per the data given in the question,

Apr-01 Accounts receivable A/c Dr. $6,900

To Sales A/c $6,900

Apr-01 Cost of goods sold A/C Dr. $2,760

To Inventory A/c $2,760

( Being cost of goods on merchandise is recorded)

Jun-10 Allowance for doubtful debt A/c Dr. $ 4,600

Cash A/c Dr. $2,300

To Accounts receivable A/c $6,900

( Being bad debt expense is recorded)

Oct-11 Accounts receivable A/c Dr. $4,600

To Allowance for doubtful debt A/c $4,600

( Being bad debt recovered is recorded)

Oct-11 Cash Dr. $4,600

To Accounts receivable A/c $4,600

( Being cash recovered from bad debt is recorded)