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, $17,400. The cost of goods sold was $12,500. Sept. 30. Received $4,700 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 $12,700 cash in full payment. If an amount box does not require an entry, leave it blank. May 24-sale May 24-cost Sept. 30 Accounts Receivable-Old Town Cafe Sales Cost of Goods Sold Inventory ▼ Cash Allowance for Doubtful Accounts Accounts Receivable-Old Town Cafe Dec. 7-reinstate Accounts Receivable-Old Town Cafe Allowance for Doubtful Accounts Dec. 7-collection Cash Accounts Receivable-Old Town Cafe 17,400 30 000 12,500 17,400 12,700 12,500 12,700 00 10 10 10 12,700
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, $17,400. The cost of goods sold was $12,500. Sept. 30. Received $4,700 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 $12,700 cash in full payment. If an amount box does not require an entry, leave it blank. May 24-sale May 24-cost Sept. 30 Accounts Receivable-Old Town Cafe Sales Cost of Goods Sold Inventory ▼ Cash Allowance for Doubtful Accounts Accounts Receivable-Old Town Cafe Dec. 7-reinstate Accounts Receivable-Old Town Cafe Allowance for Doubtful Accounts Dec. 7-collection Cash Accounts Receivable-Old Town Cafe 17,400 30 000 12,500 17,400 12,700 12,500 12,700 00 10 10 10 12,700
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
8.2
Transcribed Image Text: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, $17,400. The cost of goods sold was $12,500.
Sept. 30. Received $4,700 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 $12,700 cash in full payment.
If an amount box does not require an entry, leave it blank.
May 24-sale
May 24-cost
Sept. 30
Accounts Receivable-Old Town Cafe
Sales
Cost of Goods Sold
Inventory
Cash
Allowance for Doubtful Accounts
Accounts Receivable-Old Town Cafe
Dec. 7-reinstate Accounts Receivable-Old Town Cafe
Allowance for Doubtful Accounts
Dec. 7-collection Cash
Accounts Receivable-Old Town Cafe
17,400
12,500
000
12,700
17,400
12,500
12,700
12,700
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