Entries for Uncollectible Receivables, using Allowance Method

Journalize the following transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables:

May 24 Sold merchandise on account to Old Town Cafe, $9,600. The cost of goods sold was $6,900.

Sept. 30 Received $1,900 from Old Town Cafe and wrote off the remainder owed on the sale of May 24 as uncollectible.

Dec. 7 Reinstated the account of Old Town Cafe that had been written off on September 30 and received $7,700 cash in full payment.

If an amount box does not require an entry, leave it blank.

May 24-sale

May 24-cost

Sept. 30

Dec. 7-reinstate

Dec. 7-collection