Journalize the following transactions in the accounts of Arrow Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables: Jan. 19. Sold merchandise on account to Dr. Sinclair Welby, $42,700. The cost of the merchandise sold was $23,100. July 7. Received $11,500 from Dr. Sinclair Welby and wrote off the remainder owed on the sale of January 19 as uncollectible. Nov. 2. Reinstated the account of Dr. Sinclair Welby that had been written off on July 7 and received $31,200 cash in full payment. If an amount box does not require an entry, leave it blank. Jan. 19-sale fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Jan. 19-cost fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 July 7 fill in the blank 14 fill in the blank 15 fill in the blank 17 fill in the blank 18 fill in the blank 20 fill in the blank 21 Nov. 2-reinstate fill in the blank 23 fill in the blank 24 fill in the blank 26 fill in the blank 27 Nov. 2-collection fill in the blank 29 fill in the blank 30 fill in the blank 32 fill in the blank 33
Bad Debts
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.
Entries for Uncollectible Accounts, using Direct Write-Off Method
Journalize the following transactions in the accounts of Arrow Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables:
| Jan. 19. | Sold merchandise on account to Dr. Sinclair Welby, $42,700. The cost of the merchandise sold was $23,100. |
| July 7. | Received $11,500 from Dr. Sinclair Welby and wrote off the remainder owed on the sale of January 19 as uncollectible. |
| Nov. 2. | Reinstated the account of Dr. Sinclair Welby that had been written off on July 7 and received $31,200 cash in full payment. |
If an amount box does not require an entry, leave it blank.
| Jan. 19-sale | fill in the blank 2 | fill in the blank 3 | |
| fill in the blank 5 | fill in the blank 6 | ||
| Jan. 19-cost | fill in the blank 8 | fill in the blank 9 | |
| fill in the blank 11 | fill in the blank 12 | ||
| July 7 | fill in the blank 14 | fill in the blank 15 | |
| fill in the blank 17 | fill in the blank 18 | ||
| fill in the blank 20 | fill in the blank 21 | ||
| Nov. 2-reinstate | fill in the blank 23 | fill in the blank 24 | |
| fill in the blank 26 | fill in the blank 27 | ||
| Nov. 2-collection | fill in the blank 29 | fill in the blank 30 | |
| fill in the blank 32 | fill in the blank 33 |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
