Question

During August 2018​, Bingham Company recorded the​ following: bullet Sales of $ 68 comma 900 ​($ 55 comma 000 on​ account; $ 13 comma 900 for​ cash). Ignore Cost of Goods Sold. bullet Collections on​ account, $ 45 comma 100. bullet ​Write-offs of uncollectible​ receivables, $ 1 comma 680. bullet Recovery of receivable previously written​ off, $ 300. Requirements 1. Journalize Bingham​'s transactions during August 2018​, assuming Bingham uses the direct​ write-off method. 2. Journalize Bingham​'s transactions during August 2018​, assuming Bingham uses the allowance method.

Answer 1

Answer:

Explanation:

Direct Method  

Aug

a

Dr Accounts Receivable 55,000

Dr Cash 13,900

   Cr Sales  68,900

b

Dr Cash 45,100

    Cr Accounts Receivable  45,100

c

Dr Bad Debt Expense 1,680

    Cr Accounts Receivable  1,680

d

Dr Accounts Receivable 300

    Cr Bad Debt Expense  300

Dr Cash 300  

   Cr Accounts Receivable  300

Allowance Method  

a

Dr Accounts Receivable 55,000

Dr Cash 13,900  

    Cr Sales  68,900

b

Dr Cash 45,100

    Cr Accounts Receivable  45,100

c

Dr Allowance for Doubtful debts 1,680  

   Cr Accounts Receivable      1,680

d

Dr Accounts Receivable 300  

   Cr Allowance for Doubtful debts  300

Dr Cash 300  

    Cr Accounts Receivable 300