Chapter 8, Problem 8.4EX

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 $18,450. The cost of goods sold was $11,000.
Sept.	30	Received $6,000 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 $12,450 cash in full payment.