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., $18,900. The cost of the merchandise sold was $11,200. Aug. 30. Received $8,000 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 $10,900 cash in full payment.

Answer 1

May 1

Dr Account receivable-Beijing Palace Co., $18,900

Cr Sales $18,900

May 1

Dr Cost of goods sold $11,200

Cr Merchandise inventory $11,200

Aug. 30

Dr Cash $8,000

Dr Allowance for doubtful account $10,900

Cr Account receivable-Beijing Palace Co.$18,900

Dec. 8

Dr Account receivable-Beijing Palace co.$10,900

Cr Allowance for doubtful account $10,900

Dec. 8

Dr Cash $10,900

Cr Account receivable-Beijing Palace Co. $10,900

Step-by-step explanation:

Preparation of the Journal entries in the accounts of Sedona Interiors Company

May 1

Dr Account receivable-Beijing Palace Co., $18,900

Cr Sales $18,900

May 1

Dr Cost of goods sold $11,200

Cr Merchandise inventory $11,200

Aug. 30

Dr Cash $8,000

Dr Allowance for doubtful account $10,900

($18,900-$8,000)

Cr Account receivable-Beijing Palace Co.$18,900

Dec. 8

Dr Account receivable-Beijing Palace co.$10,900

Cr Allowance for doubtful account $10,900

Dec. 8

Dr Cash $10,900

Cr Account receivable-Beijing Palace Co. $10,900