Copyright

Mar. 17 Received $275 from Shawn McNeely and wrote off the remainder owed of $1,000 as...

Question:

Mar. 17 Received $275 from Shawn McNeely and wrote off the remainder owed of $1,000 as uncollectible.
July 29 Reinstated the account of Shawn McNeely and received $1,000 cash in full payment.

Journalize the above transactions, using the allowance method of accounting for uncollectible receivables.

Receivables:

Receivables are recorded as a current asset when a sale is made with a corresponding credit to sales. The receivable remains on the balance sheet until paid unless written off by a company.

Answer and Explanation:


The longer a receivable remains outstanding the higher the probability of non-payment on the part of the customer. Under the allowance method when a customer account is written off, receivables is credited and allowance for doubtful accounts is credited. When a previously written off receivable is recovered the account is reinstated and receipt of the receivable is recorded as normal.


Date Account Title and Explanation Debit Credit
March 17 Cash $275
Allowance for Doubtful Account $1,000
Accounts Receivable $1,275
Record partial receipt and writeoff of receivables


Date Account Title and Explanation Debit Credit
July 29 Accounts Receivable $1,000
Allowance for Doubtful Account $1,000
Reinstate receivable partially written off on March 17


Date Account Title and Explanation Debit Credit
July 29 Cash $1,000
Accounts Receivable $1,000
Record payment of receivables recovered



Learn more about this topic:

Loading...
Accounts Receivable: Definition, Process & Examples

from Accounting 101: Financial Accounting

Chapter 7 / Lesson 1
71K

Related to this Question

Explore our homework questions and answers library