EX 9-3 Entries for uncollectible accounts, using direct write-off method

Journalize the following transactions in the accounts of Cecena Medical Co., a medical equipment
company that uses the direct write-off method of accounting for uncollectible receivables:

Feb. 13. Sold merchandise on account to Dr. Ben Katz, $120,000. The cost of the merchandise
sold was $72,000.
May 4. Received $90,000 from Dr. Ben Katz and wrote off the remainder owed on the
sale of February 13 as uncollectible.
Nov. 19. Reinstated the account of Dr. Ben Katz that had been written off on May 4
and received $30,000 cash in full payment.

Answer:
Feb. 13
Accounts Receivable—Dr. Ben Katz.................. 120,000                  
                        Sales................................................................  120,000  

13 Cost of Merchandise Sold .................................. 72,000  
                          Merchandise Inventory..................................  72,000

May 4
Cash...................................................................... 90,000  
 Bad Debt Expense............................................... 30,000  
                         Accounts Receivable—Dr. Ben Katz............  120,000

Nov. 19
Accounts Receivable—Dr. Ben Katz.................. 30,000  
                        Bad Debt Expense..........................................  30,000  
19
Cash...................................................................... 30,000  
                         Accounts Receivable—Dr. Ben Katz............  30,000

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