direct write-off method instructions Reinstated the account of Rachel Elpel and

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direct write-off method

instructions

Reinstated the account of Rachel Elpel and received $1,350 cash in full payment.

Journalize the transactions, using the direct write-off method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

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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.

CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-Rachel Elpel 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Store Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 530 Office Salaries Expense 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense

Explanation / Answer

Solution.

1. Oct 1.

Cash account Deebited $600

Account receivable account credited $600

2. Oct 1.

Bad debt account debited $1,350

Account receivable credited $1,350

3. Dec.20.

Bank account debited $1,350

Bad debt recoverd account credited $1,350

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