Knowledge Check 01 On December 31, management had determined that it would not be able to collect the $1,200 owed to it by one of its customers. On Jan 15 in the next year, a check in the amount of $600 was unexpectedly received from this customer. Management does not expect any future collections from this customer. The company uses the direct write-off method to account for its uncollectible accounts. Prepare the necessary journal entry on January 15 to record the events by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns. Prepare two separate journal entries. The first journal entry is to record the reinstatement of the account receivable and the second is to record the receipt of cash.

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Business

Tianna Daniels

13 October, 08:00

Knowledge Check 01 On December 31, management had determined that it would not be able to collect the $1,200 owed to it by one of its customers. On Jan 15 in the next year, a check in the amount of $600 was unexpectedly received from this customer. Management does not expect any future collections from this customer. The company uses the direct write-off method to account for its uncollectible accounts. Prepare the necessary journal entry on January 15 to record the events by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns. Prepare two separate journal entries. The first journal entry is to record the reinstatement of the account receivable and the second is to record the receipt of cash.

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Bishop · Answer 1

The complete journal entries should be as follows:

December 31 (write off)

Dr Allowance for Doubtful Accounts account 1,200

Cr Accounts Receivable account 1,200

January 15 (partial write off reversing)

Dr Accounts Receivable account 600

Cr Allowance for Doubtful Accounts account 600

January 15 (record collection)

Dr Cash account 600

Cr Accounts Receivable account 600