Question

Journalize the following transactions in the accounts of Sedona Interiors Company, a Restaurant Supply Company that uses the allowance method of accounting for uncollectible receivables:

May 1. Sold merchandise on account to Beijing Palace Co., $15,300. The cost of the merchandise sold was $11,000.
Aug. 30. Received $4,000 from Beijing Palace Co. and wrote off the remainder owed on the sale of May 1 as uncollectible.
Dec. 8. Reinstated the account of Beijing Palace Co. that had been written off on August 30 and received $11,300 cash in full payment.

Answer 1

May 1.

Dr Account Receivable 15,300

Cr Sales 15,300

( to record sales to Beijing Palace Co.)

Dr Cost of merchandise sold 11,000

Cr Merchandise inventory 11,000

( to record cost of goods solds to Beijing Palace Co.)

Aug.30

Dr Cash 4,000

Dr Allowance for uncollectible debt 11,300

Cr Account Receivable 15,300

( to record settlement from Beijing Palace Co. and to realize the remainder receivable from Beijing Palace Co. as uncollectible)

Dec.8

Dr Cash 11,300

Cr Allowance for uncollectible debt 11,300

( to record the remainder settlement from Beijing Palace Co.)

Step-by-step explanation:

Explanation is put under each entry.