**Direct Write-Off Method for Accounting Uncollectible Receivables**In this example, we will detail the process of handling uncollectible receivables using the direct write-off method. Below are the transactions we will record:### Transactions:- **April 1**: Sold merchandise on account to Jim Dobbs for **$6,600**. The cost of the merchandise is **$2,640**.- **June 10**: Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.- **October 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 the nearest dollar amount.#### Journal Entries:**April 1:**```Date Account Titles Debit Credit----------------------------------------------------------April 1 Accounts Receivable $6,600 Sales Revenue $6,600 (Sold merchandise on account) Cost of Goods Sold $2,640 Merchandise Inventory $2,640 (Recorded cost of goods sold)```**June 10:**```Date Account Titles Debit Credit----------------------------------------------------------June 10 Cash $2,200 Accounts Receivable $2,200 (Received payment for one-third of the receivable) Bad Debt Expense $4,400 Accounts Receivable $4,400 (Wrote off the remainder of the receivable)```**October 11:**```Date Account Titles Debit Credit----------------------------------------------------------Oct 11 Accounts Receivable $4,400 Bad Debt Expense $4,400 (Reinstated the account of Jim Dobbs) Cash $4,400 Accounts Receivable $4,400 (Received cash in full payment)```### Notes:These journal entries are crucial in understanding how to handle uncollectible accounts using the direct write-off method. This method involves writing off specific accounts when they are deemed uncollectible and then reinstating them if payment is later received. This method is straightforward but may not comply with the matching principle in accounting.### Graphs or Diagrams:There are no graphs or diagrams associated with these transactions.This illustrative

Journal entry is the process of recording the business transactions in the books of accounts for the…

Using the direct write-off method of accounting for uncollectible receivables. Transactions: April Sold merchandise on account to Jim Dobbs, $6,600. The cost of the merchandise is $2,640. 1 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. June Oc. 11 Reinstated the account of Jim Dobbs for 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.

Using the direct write-off method of accounting for uncollectible receivables. Transactions: April Sold merchandise on account to Jim Dobbs, $6,600. The cost of the merchandise is $2,640. 1 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. June Oc. 11 Reinstated the account of Jim Dobbs for 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.

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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. Journalize the following transactions using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400. 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.