Concept explainers
Accounts receivable
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.
Direct write-off method:
This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.
To journalize: The collection of $1,200 cash and write-off of Person M’s $4,000 uncollectible accounts, using direct write-off method.
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- Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables: Oct. 2: Received $2,890 from Paula Spitler and wrote off the remainder owed of $2,250 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20: Reinstated the account of Paula Spitler and received $2,250 cash in full payment. Dec. 20-Reinstate Dec. 20-Collectionarrow_forwardDirect Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables: Mar. 17. Received $275 from Shawn McNeely and wrote off the remainder owed of $1,000 as uncollectible. If an amount box does not require an entry, leave it blank. Mar. 17 July 29. Reinstated the account of Shawn McNeely and received $1,000 cash in full payment. July 29. July 29.arrow_forwardDirect Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables. Mar. 17: Received $3,330 from Matthew Chapman and wrote off the remainder owed of $2,530 as uncollectible. If an amount box does not require an entry, leave it blank. 38 Mar. 17 July 29: Reinstated the account of Matthew Chapman and received $2,530 cash in full payment. July 29 July 29arrow_forward
- Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables: Oct. 2: Received $3,150 from William Pruitt and wrote off the remainder owed of $2,680 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20: Reinstated the account of William Pruitt and received $2,680 cash in full payment. Dec. 20-Reinstate Dec. 20-Collectionarrow_forwardDirect Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables: Oct. 2: Received $2,060 from Ian Kearns and wrote off the remainder owed of $2,310 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20: Reinstated the account of Ian Kearns and received $2,310 cash in full payment. If an amount box does not require an entry, leave it blank. Dec. 20-Reinstate Dec. 20-Collectionarrow_forwardAllowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Oct. 2. Received $2,040 from William Pruitt and wrote off the remainder owed of $3,040 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20. Reinstated the account of William Pruitt and received $3,040 cash in full payment. If an amount box does not require an entry, leave it blank. Reinstate Collectionarrow_forward
- Allowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Oct. 2. Received $1,970 from Ian Kearns and wrote off the remainder owed of $1,360 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20. Reinstated the account of Ian Kearns and received $1,360 cash in full payment. Reinstate Collectionarrow_forwardJournalize the following transactions, using the direct write-off method of accounting for uncollectible receivables. Mar. 17: Received $3,190 from Paula Spitler and wrote off the remainder owed of $5,900 as uncollectible. If an amount box does not require an entry, leave it blank. Mar. 17 fill in the blank e83d81f48fed021_2 fill in the blank e83d81f48fed021_3 fill in the blank e83d81f48fed021_5 fill in the blank e83d81f48fed021_6 fill in the blank e83d81f48fed021_8 fill in the blank e83d81f48fed021_9 July 29: Reinstated the account of Paula Spitler and received $5,900 cash in full payment. July 29 fill in the blank cf28d0043fd3fb7_2 fill in the blank cf28d0043fd3fb7_3 fill in the blank cf28d0043fd3fb7_5 fill in the blank cf28d0043fd3fb7_6 July 29 fill in the blank cf28d0043fd3fb7_8 fill in the blank cf28d0043fd3fb7_9 fill in the blank cf28d0043fd3fb7_11 fill in the blank cf28d0043fd3fb7_12arrow_forwardAllowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Oct. 2. Received $2,900 from Keith MacPhearson and wrote off the remainder owed of $3,740 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Dec. 20. Reinstated the account of Keith MacPhearson and received $3,740 cash in full payment. Reinstate Collectionarrow_forward
- Allowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Mar. 17. Received $275 from Shawn McNeely and wrote off the remainder owed of $1,000 as uncollectible. If an amount box does not require an entry, leave it blank. Mar. 17 July 29. Reinstated the account of Shawn McNeely and received $1,000 cash in full payment. July 29 July 29arrow_forwardAllowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables. Mar. 17: Received $2,570 from Ian Kearns and wrote off the remainder owed of $3,910 as uncollectible. If an amount box does not require an entry, leave it blank. Mar. 17 July 29: Reinstated the account of Ian Kearns and received $3,910 cash in full payment. July 29 18 July 29arrow_forwardUsing the direct write-off method of accounting for uncollectible receivables. Transactions: 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. Required: Journalize the above transactions. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-Alan Albertson 122 Accounts Receivable-Jim Dobbs 123 Accounts Receivable-John Groves 124 Accounts Receivable-Jan Lehn 125 Accounts Receivable-Jacob Marley 126 Accounts Receivable-Mr.Potts 127 Accounts Receivable-Chad Thomas 128 Accounts Receivable-Andrew Warren 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Inventory 145…arrow_forward
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage