Lee and Chen Distributors uses the direct write-off method in accounting for uncollectible accounts. 20-1 Feb. 16 Sold merchandise on account to Biggs and Daughters, $16,000. Mar. 23 Sold merchandise on account to Lloyd Place, $12,800. June 8 Received $12,000 from Biggs and Daughters and wrote off the remainder owed on the sale of February 16 as uncollectible. Sept. 27 Received $7,000 from Lloyd Place and wrote off the remainder owed on the sale of March 23 as uncollectible. Nov. 18 Reinstated the account of Biggs and Daughters, which had been written off on June 8, and received $4,000 cash in full settlement. 20-2 Jan. 11 Reinstated the account of Lloyd Place, which had been written off on September 27 of the previous year, and received $5,800 cash in full settlement. CHART OF ACCOUNTS Lee and Chen Distributors General Ledger ASSETS 101 Cash 122 Accounts ReceivableAccounts Receivable/Biggs and DaughtersAccounts Receivable/Lloyd Place 122.1 Allowance for Doubtful Accounts 141 Supplies 145 Prepaid Insurance 181 Office Equipment 181.1 Accumulated Depreciation-Office Equipment LIABILITIES 202 Accounts Payable 219 Wages Payable EQUITY 313 Income Summary 321 Common Stock 331 Retained Earnings REVENUE 401 Sales 415 Uncollectible Accounts Recovered EXPENSES 511 Wages Expense 512 Advertising Expense 521 Rent Expense 523 Supplies Expense 525 Phone Expense 532 Bad Debt Expense 535 Insurance Expense 541 Depreciation Expense-Office Equipment 549 Miscellaneous Expense

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Lee and Chen Distributors uses the direct write-off method in accounting for uncollectible accounts.

20-1
Feb. 16	Sold merchandise on account to Biggs and Daughters, $16,000.
Mar. 23	Sold merchandise on account to Lloyd Place, $12,800.
June 8	Received $12,000 from Biggs and Daughters and wrote off the remainder owed on the sale of February 16 as uncollectible.
Sept. 27	Received $7,000 from Lloyd Place and wrote off the remainder owed on the sale of March 23 as uncollectible.
Nov. 18	Reinstated the account of Biggs and Daughters, which had been written off on June 8, and received $4,000 cash in full settlement.
20-2
Jan. 11	Reinstated the account of Lloyd Place, which had been written off on September 27 of the previous year, and received $5,800 cash in full settlement.

CHART OF ACCOUNTS

Lee and Chen Distributors

General Ledger

	ASSETS
101	Cash
122	Accounts ReceivableAccounts Receivable/Biggs and DaughtersAccounts Receivable/Lloyd Place
122.1	Allowance for Doubtful Accounts
141	Supplies
145	Prepaid Insurance
181	Office Equipment
181.1	Accumulated Depreciation-Office Equipment

	LIABILITIES
202	Accounts Payable
219	Wages Payable

	EQUITY
313	Income Summary
321	Common Stock
331	Retained Earnings

	REVENUE
401	Sales
415	Uncollectible Accounts Recovered

	EXPENSES
511	Wages Expense
512	Advertising Expense
521	Rent Expense
523	Supplies Expense
525	Phone Expense
532	Bad Debt Expense
535	Insurance Expense
541	Depreciation Expense-Office Equipment
549	Miscellaneous Expense

Customer List
Biggs and Daughters
Lloyd Place

General Journal
Record these transactions in general journal form during the year 20-1. General Journal Instructions
How does grading work?
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DATE
ACCOUNT TITLE
Feb. 16 Accounts Receivable/Biggs and Daughters
Sales
Mar. 23
Jun. 8 Cash
Jun. 8
Accounts Receivable/Lloyd Place
Sales
Sep. 27
Sep. 27 Cash
Nov. 18
GENERAL JOURNAL
Bad Debt Expense
Accounts Receivable/Biggs and Daughters
Uncollectible Accounts Recovered
Bad Debt Expense
Accounts Receivable/Lloyd Place
Uncollectible Accounts Recovered
Nov. 18 Accounts Receivable/Biggs and Daughters
Uncollectible Accounts Recovered
Cash
Accounts Receivable/Biggs and Daughters
POST. REF.
DEBIT
16,000.00
12,800.00
12,000.00
4,000.00
7,000.00
5.800.00
4.000.00
4,000.00
PAGE 1
Score: 160/201
CREDIT
16,000.00
12,800.00
16,000.00
12,800.00
4,000.00
4,000.00

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