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Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off...

Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $2,000 account of a customer, C. Green. On March 9, it receives a $1,500 payment from Green.

1. Prepare the journal entry for January 31.
2. Prepare the journal entries for March 9; assume no additional money is expected from Green.

1. Record the write-off of Green's $2,000 account.

Note: Enter debits before credits.
Date General Journal Debit Credit
Jan 31

2. Record the reinstatement of Green's account, assuming no additional money is expected.

Note: Enter debits before credits.
Date General Journal Debit Credit
Mar 09

3. Record the cash receipt from Green.

Note: Enter debits before credits.
Date General Journal Debit Credit
Mar 09

Levine Company uses the perpetual inventory system.

Apr. 8 Sold merchandise for $9,200 (that had cost $6,799) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee.
12 Sold merchandise for $10,000 (that had cost $6,480) and accepted the customer's Continental Card. Continental charges a 2.5% fee.


Prepare journal entries to record the above credit card transactions of Levine Company.

  • Sold merchandise for $9,200 and accepted the customer’s Suntrust Bank Card. Suntrust charges a 4% fee.

Note: Enter debits before credits.
Date General Journal Debit Credit
Apr 08
  • Record the cost of goods sold, $6,799.

Note: Enter debits before credits.
Date General Journal Debit Credit
Apr 08
  • Sold merchandise for $10,000 and accepted the customer’s Continental Card. Continental charges a 2.5% fee.

Note: Enter debits before credits.
Date General Journal Debit Credit
Apr 12
  • Record the cost of goods sold, $6,480.

Note: Enter debits before credits.
Date General Journal Debit Credit
Apr 12

Solutions

Expert Solution

Answer :- Gomez Corp :- 1 :- Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $2,000 account of a customer, C. Green. On March 9, it receives a $1,500 payment from Green.

Journal entries :=

On January 31, it wrote off an $2,000 account of a customer, C. Green.
Record the write-off of Green's $2,000 account. :-

Date Journal Entry Debit Credit
Jan 31st Allowance for Doubtful Accounts $2,000
Accounts Receivable - Green $2,0000
( To record write off an uncollective amounts)

Note :- When a customer is found as debtor which is uncollective then their due amount will be adjust as doubtful accounts.

2 :-  The journal entries for March 9; assume no additional money is expected from Green. On March 9, it receives a $1,500 payment from Green. The reinstatement of Green's account, The cash receipt from Green.

Date Journal Entry Debit Credit
Mar 9 Accounts Receivable - Green $1,500
Allowance for Doubtful Accounts $1,500
( To reinstate account previously written off)
Note : In reinstate entry , The written offf entry will be just opposite here.
Mar 9 Cash $1,500
Accounts Receivable - Green $1,500
( To record payment )
Note : Cash is debited and account receivable is credited for receiving the amount.

Answer : Levine Company 1 :- Levine Company uses the perpetual inventory system.

Sold merchandise for $9,200 (that had cost $6,799) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. The cost of goods sold, $6,799.

Date Journal entries Debit Credit
Apr 8 Cash $8,832
Credit Card expense $368
Sales $9,200
( To record the sale of merchandise and Credit card charges applied )
Apr 8 Cost of goods sold $6,799
Merchandise inventory $6,799
( To record cost of goods sold )

Working note :-

4 % charges = $9,200 x 4 % = $368

2 :- Sold merchandise for $10,000 (that had cost $6,480) and accepted the customer's Continental Card. Continental charges a 2.5% fee. The cost of goods sold, $6,480.

Date Journal entries Debit Credit
Apr 12 Cash 9,750
Credit card expense    $250
Sales $10,000
( To record the sale of merchandise and Credit continental card charges applied )
Apr 12 Cost of goods sold $6,480
   Merchandise inventory $6,480
( To record cost of goods sold )

Working note :-

4 % charges = $10,000 x 4 % = $250

ekkarill92 answered 1 year ago
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