Journalize the following transactions in the accounts for Sedona interiors company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. May 1st sold merchandise on account to Beijing palace company, $17,700. The cost of the merchandise sold was $12,700. August 30th received $3,700 from Beijing palace company and wrote off the remainder road on the sale of May 1st as uncollectible. December 8th reinstated the account of Beijing palace company that had been written off on August 30th and received 14,000 cash and full payment. for a compound transaction, if an amount box does not require an entry, leave it blank. May 1st sale______ ______ May first cost _______ _______ August 30th ________ ________ ________ December 8th reinstated _________ __________ December 8th collection ___________
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 receivables using allowance method
Journalize the following transactions in the accounts for Sedona interiors company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables.
May 1st sold merchandise on account to Beijing palace company, $17,700. The cost of the merchandise sold was $12,700.
August 30th received $3,700 from Beijing palace company and wrote off the remainder road on the sale of May 1st as uncollectible.
December 8th reinstated the account of Beijing palace company that had been written off on August 30th and received 14,000 cash and full payment.
for a compound transaction, if an amount box does not require an entry, leave it blank.
May 1st sale______
______
May first cost _______
_______
August 30th ________
________
________
December 8th reinstated _________
__________
December 8th collection ___________
___________
Under the allowance method, uncollectible accounts are debited to the Allowance for doubtful accounts / uncollectible accounts.
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