Uncollectible accounts, using direct write-off method

Obi. 3

Illustrate the effects on the accounts and financial statements of the following transactions in the accounts of Valley Care & Supplies Co., a local hospital supply company that uses the direct write-off method of accounting for uncollectible receivables:

March 18 Received $5,000 on an account and wrote off the remainder

owed of $10.000 as uncollectible.

Aug. 29 Reinstated the account that had been written off on March 18

and received $10,000 cash in full payment.