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, $38,700. The cost of the merchandise sold was $20,900. July 7. Received $8,100 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 $30,600 cash in full payment. If an amount box does not require an entry, leave it blank. Jan. 19-sale - Select - - Select
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.
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, $38,700. The cost of the merchandise sold was $20,900. |
| July 7. | Received $8,100 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 $30,600 cash in full payment. |
If an amount box does not require an entry, leave it blank.
| Jan. 19-sale |
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| Jan. 19-cost |
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| July 7 |
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| Nov. 2-reinstate |
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| Nov. 2-collection |
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