May 24 Sold merchandise on account to Old Town Cafe $18,450. The cost of goods sold was $11,000. Sept. 30 Received $6,000 from Old Town Cafe and wrote off the remainder owed on the sale of May 24 as uncollectible. Dec. 7 Reinstated the account of Old Town Cafe that had been written off on September 30 and received $12,450 cash in full payment. Journalize the above transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.

Question

Javon Reese

Business

26 March, 03:37

May 24 Sold merchandise on account to Old Town Cafe $18,450. The cost of goods sold was $11,000. Sept. 30 Received $6,000 from Old Town Cafe and wrote off the remainder owed on the sale of May 24 as uncollectible. Dec. 7 Reinstated the account of Old Town Cafe that had been written off on September 30 and received $12,450 cash in full payment. Journalize the above transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables. Refer to the Chart of Accounts for exact wording of account titles.

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Tori Meyer · Answer 1

Answer and Explanation:

Journal entries

May 24

Dr Account Receivable Old Town Cafe $18,450

Cr Sales $18,450

To record sales on merchandise on account

May 24,

Dr Cost of merchandise sold $11,000

Cr Merchandise inventory $11,000

To record the cost of goods sold

Sept 30

Dr Cash $6,000

Dr Allowance for doubtful accounts $12,450

Cr Account Receivable Old Town Cafe $18,450

To record cash collection written off uncollectible account receivable

Written off uncollectible account receivable

$12,450 ($18,450-$6,000)