Question

Entries for Uncollectible Accounts, using Direct Write-Off Method Journalize the following transactions in the accounts of Cecena Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables. Feb. 13. Sold merchandise on account to Dr. Ben Katz, $59,400. The cost of the merchandise sold was $32,100. May 4. Received $11,900 from Dr. Ben Katz and wrote off the remainder owed on the sale of February 13 as uncollectible. Nov. 19. Reinstated the account of Dr. Ben Katz that had been written off on May 4 and received $47,500 cash in full payment. For a compound transaction, if an amount box does not require an entry, leave it blank. Feb. 13-sale Feb. 13-cost May 4 Nov. 19-reinstate Nov. 19-collection

Answer 1

In direct write off method, bad debt expense is directly debited on the account is determined as uncollectible.

Date	Account Title	Debit	Credit
Feb 13	Accounts Receivable	$59,400
	Sales		$59,400
	(To record sales on account)
Feb 13	Cost of good sold	$32,100
	Merchandise Inventory		$32,100
	(To record cost of good sold)
May 4	Cash	$11,900
	Bad Debt Expense	$47,500
	Accounts Receivable		$59,400
	(To record collection from customer and write off account)
Nov 19	Accounts Receivable	$47,500
	Bad Debt Expense		$47,500
	(Top reinstate the account previously written off)
Nov 19	Cash	$47,500
	Accounts Receivable		$47,500
	(To record collection from customer)