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2 years ago

Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables.

Business

1 answer:

Misha Larkins [42]2 years ago

4 0

Answer:

April 1

Dr Accounts Receivable $8,400

Cr Sales $8,400

Dr Cost of Merchandise Sold $3,360

Cr Merchandise Inventory $3,360

June 10

Dr Cash $2,800

Dr Allowance for Doubtful Accounts $5,600

Cr Accounts Receivable—Jim Dobbs $8,400

Oct. 11

Dr Accounts Receivable—Jim Dobbs $5,600

Cr Allowance for Doubtful Accounts $5,600

11 Dr Cash $5,600

Cr Accounts Receivable—Jim Dobbs $5,600

Explanation:

Preparation of the journal entries using the direct write-off method of accounting for uncollectible receivables.

April 1

Dr Accounts Receivable $8,400

Cr Sales $8,400

Dr Cost of Merchandise Sold $3,360

Cr Merchandise Inventory $3,360

June 10

Dr Cash $2,800

(1/3*$8,400)

Dr Allowance for Doubtful Accounts $5,600

($8,400-$2,800)

Cr Accounts Receivable—Jim Dobbs $8,400

Oct. 11

Dr Accounts Receivable—Jim Dobbs $5,600

Cr Allowance for Doubtful Accounts $5,600

11 Dr Cash $5,600

Cr Accounts Receivable—Jim Dobbs $5,600

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Finders Investigative Services

End-of-Period Income Statement

For the Year Ended June 30, 2019

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Rent Revenue ~ 12,000

730,000

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End-of-Period Balance Sheet

For the Year Ended June 30, 2019

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Account Title ~ Dr. Cr. ~

Cash ~ 28,000

Accounts Receivable ~ 69,600

Supplies ~ 4,600

Prepaid Insurance ~ 2,500

Building ~ 395,300

Accounts Payable ~ 11,700

Salaries Payable ~ 3,000

Unearned Rent ~ 2,000

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$ 500,000 $ 500,000

Journal Entries

1) Income Summary $ 608500 Dr

Salaries Expense ~ 522,100 Cr

Rent Expense ~ 48,000 Cr

Supplies Expense ~ 10,800 Cr

Depreciation Expense-Building ~ 8,750 Cr

Utilities Expense ~ 7,150 Cr

Repairs Expense ~ 3,000 Cr

Insurance Expense ~ 2,500 Cr

Miscellaneous Expense ~ 6,200 Cr

2) Service Fees $ ~ 718,000 Dr

Rent Revenue ~ 12,000 Dr

Income Summary $ 730,000 Cr

3) Income Summary $121,500 Dr

Stacy Tanner Capital Account $ 121,500 Cr

4) Stacy Tanner Capital Account $ 12,000 Dr

Stacy Tanner Drawings $ 12000 Cr

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