Uncollectable Accounts- Hwk Help?
Jan 5 Sold merchandise to John Welcher for $1,200, terms n/15
Apr 15 Received $200 from John Welcher on account.
Aug 21 Wrote off as uncollectable the balance of the John Welcher account when he declared bankruptcy.
Oct 5 Unexpectedly received a check for $250 for John Welcher
Favorite Answer
dr accounts receivable 1,200.
cr sales 1,200.
April 15
dr cash 200.
cr accounts receivable 200.
Aug. 21
dr allowance for doubtful accounts 1,000.
cr accounts receivable 1,000.
Oct. 5
reinstate the accounts receivable for 250.
dr accounts receivable 250.
cr allowance for doubtful accounts 250.
then:
dr cash 250.
cr accounts receivable 250.
If you don’t reinstate the accounts receivable for 250., what are you going to cr against the cash dr for 250. ?
I hope this helps
DEBIT: ACCOUNTS RECEIVABLE: John Welcher
CREDIT: SALES
apr 15
DEBIT: CASH
CREDIT: ACCOUNTS RECEIVABLE: John Welcher
aug 21:
same as this: “http://media.wiley.com/Lux/37/20937.ngr001.jpg”
except, it’s called “uncollectible accounts expense” rather than bad debts expense
oct 5
DEBIT: CASH
CREDIT: ACCOUNTS RECEIVABLE: John Welcher
http://www.netmba.com/accounting/fin/process/ledger/
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