Question

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables.

April 1Sold merchandise on account to Jim Dobbs, $9,600. The cost of goods sold is $6,400.

June 10Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.

Oct. 11Reinstated the account of Jim Dobbs and received cash in full payment.

If an amount box does not require an entry, leave it blank.

April 1

April 1

June 10

Oct. 11

Oct. 11

Answer 1

Answer :-

Date	Account Tittle and Explanation	Debit	Credit
April 1	Account Receivable-Jim Dobbs A/c Dr.	$9,600
	To Sales A/c		$9,600
	(To record sale of merchande on account to Jim Dobbs)
April 1	Cost of goods sold A/c Dr.	$6,400
	To Merchandise Inventory A/c		$6,400
	(To record cost of goods sold)
June 10	Cash A/c Dr. (1/3 of Inventory sold = 1/3 × $9,600)	$3,200
	Allowance for doubtful accounts (Bad debts) A/c Dr.($9,600 - $3,200)	$6,400
	To Account Receivable- Jim Dobbs A/c		$9,600
	(To record Received payment for 1/3 of the receivable and wrote off the remainder )
Oct. 11	Account Receivable- Jim Dobbs A/c Dr.	$6,400
	To Allowance for doubtful accounts A/c		$6,400
	(To record the reinstating Account of Jim Dobbs)
Oct. 11	Cash A/c Dr.	$6,400
	To Account Receivable - Jim Dobbs A/c		$6,400
	(To record cash collection in full payment )