Concept explainers
Journalizing transactions using the direct write-off method
On June 1, High Performance Cell Phones sold $19,000 of merchandise to Andrew
Tracking Company on account. Andrew fell on hard times and on July 15 paid only $7,000 of the account receivable. Alter repeated attempts to collect, High Performance finally wrote off its
Requirements
- Journalize the transactions for High Performance Cell Phones using the direct write-off method. Ignore Cost of Goods Sold.
- What are some limitations that High Performance will encounter when using the direct write-off method?
Use the fallowing information to answer Exercises E9-17 and E9-18.
At January 1, 2016, Hilly Mountain Flagpoles had Accounts Receivable of $31,000, and Allowance for
- Sales of $174,000 ($157,000 on account; $17,000 for cash). Ignore Cost of Goods Sold.
- Collections on account, $131,000.
- Write-offs of uncollectible receivables, $2,200.
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