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Entries for Uncollectible Receivables, using Allowance Method Journalize the following transactions in the accounts of Arizona Interiors Company, a Restaurant Supply Company that uses the allowance method of accounting for uncollectible receivables: May 1. Sold merchandise on account to Taiwan Palace Co., $9,600. The cost of the merchandise sold was $6,900. Aug. 30. Received $2,000 from Taiwan Palace Co. and wrote off the remainder owed on the sale of May 1 as uncollectible. Reinstated the account of Taiwan Palace Co. that had been written off on August 30 and received $7,600 cash in full payment. Dec. 8. If an amount box does not require an entry, leave it blank. May 1-sale Accounts Receivable-Taiwan Palace Co. 9,600 Sales 9,600 May 1-cost Cost of Merchandise Sold 6,900 Merchandise Inventory 6,900 Aug. 30 Cash 2,000 Allowance for Doubtful Accounts 2,000 X Accounts Receivable-Taiwan Palace Co. 7,600 X Dec. 8-reinstated Accounts Receivable-Taiwan Palace Co. 7,600 Allowance for Doubtful Accounts 7,600 Dec. 8-collection Bad Debt Expense х 7,600 Allowance for Doubtful Accounts х 7,600
Entries for Notes Receivable Autumn Designs & Decorators issued a 120-day, 6% note for $78,000, dated April 13 to Zebra Furniture Company on account. Assume a 360-day year when calculating interest. a. Determine the due date of the note. August 11 ✓ b. Determine the maturity value of the note. $ 78,977.4 X Feedback Check My Work The due date is the date the note is to be paid. expressed as days. Assume a 360-day year. The maturity value is the amount that must Remember the interest rate is stated on an annual basis, while the term be paid at the due date of the note. At the due date, the company records the receipt of payment on the note. c1. Journalize the entry to record the receipt of the note by Zebra Furniture. If an amount box does not require an entry, leave it blank. Notes Receivable 78,000 ✓ Accounts Receivable-Autumn Designs Decorators 78,000 Feedback Check My Work Correct c2. Journalize the entry to record the receipt of payment of the note at maturity. If an amount box does not require an entry, leave it blank. Cash ✓ 78,977.43 X Notes Receivable 78,000 Interest Revenue ✓ 977.43 х