Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Oct. 2. Received $600 from Rachel Elpel and wrote off the remainder owed of $1,350 as uncollectible. Dec. 20. Reinstated the account of Rachel Elpel and received $1,350 cash in full payment.

Question

Still sussing out bartleby?

Answer 1

BuyFind

Financial Accounting

15th Edition

Carl Warren + 2 others

Publisher: Cengage Learning

ISBN: 9781337272124

Solutions

Chapter

Section

Answer 2

BuyFind

Financial Accounting

15th Edition

Carl Warren + 2 others

Publisher: Cengage Learning

ISBN: 9781337272124

Solutions

Chapter

Section

Answer 3

Solutions

Chapter

Section

Answer 4

Chapter

Section

Answer 5

To determine

Journalize the given transactions, using allowance method of accounting for uncollectible accounts.

Explanation of Solution

Allowance method: It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period.

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.

Write-off: Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

Prepare the journal entry to record the collection of cash and write-off of uncollectible accounts, under direct allowance method.

Date	Particulars	Debit	Credit
October 2	Cash	$600
	Allowance for doubtful accounts	$1,350
	Account receivable – Person RE		$1,950
	(To recordcash collection and write-off ofuncollectible account receivable )

Table (1)

To record the collection of cash on account, cash account must be increased and accounts receivable must be decreased by $600.

To record this write-off of uncollectible receivables under allowance method, both allowance for doubtful accounts and accounts receivable must be decreased by $1,350. Hence,

• Increase in cash (asset account) is debited with $600
• Decrease in Allowance for doubtful accounts (contra-asset accounts) is debited with $1,350, and
• Decrease in accounts receivable (asset account) is credited with ($600+$1,350) $1,950

Financial Accounting

Solutions

Financial Accounting

Explanation of Solution

Still sussing out bartleby?

The Solution to Your Study Problems

Chapter 9 Solutions

Additional Business Textbook Solutions

Oct. 2.	Received $600 from Rachel Elpel and wrote off the remainder owed of $1,350 as uncollectible.
Dec. 20.	Reinstated the account of Rachel Elpel and received $1,350 cash in full payment.