During August 2018, Magid Company recorded the following: During August 2018, Ma

Question

During August 2018, Magid Company recorded the following:

During August 2018, Magid Company recorded the following: Requirements Sales of $102,400 ($88,000 on account; $14,400 for cash). Ignore Cost of 1. Journalize Magid's transactions during August 2018, assuming Magid Goods Sold. Collections on account, $71,500 Write-offs of uncollectible receivables, $1,760 Recovery of receivable previously written off, $700 uses the direct write-off method. 2. Journalize Magid's transactions during August 2018, assuming Magid uses the allowance method

Explanation / Answer

Direct Write off Method

2

Allowance Method

DR CR Account Receivable 88000 Cash 14400 Sales Revenue 102400 (To record Sales Revenue) Cash 71500 Account Receivable 71500 (Collection on Account 71500) Bad debt Expense 1760 Account Receivable 1760 (Writes off of Un collectible) Account Receivable 700 Bad debt Expense 700 (Recovery of Previous Write off) Cash 700 Account Receivable 700 (Collection of Written off Receivable)

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