Question 3 Strickman Company uses the allowance method for estimating uncollecti

Question

Question 3 Strickman Company uses the allowance method for estimating uncollectible accounts. Prepare journal entries to record the following transactions: (Credit account titles are automatically indented when the amount is entered Do not indent manually. Record journal entries in the order presented in the problem) January 5 Sold merchandise to Sue Land for $1,800, terms n/15. April 15 Received $400 from Sue Land on account. August 21 Wrote off as uncollectible the balance of the Sue Land account when she declared bankruptcy. October 5 Unexpectedly received a check for $650 from Sue Land.

Explanation / Answer

5-Jan Accounts Receivable Dr 1800              Sales Revenue Cr 1800 ( To record sales to Sue Land) 15-Apr Cash Dr 400                 Account Receivable Cr 400 ( To record amount received from Sue Land) 21-Aug Uncollectible Amount Dr 1400                 Account Receivable Cr 1400 ( To record amount written off 1800-400 = 1400 of Sue Land on her bankruptcy) 5-Oct Accounts Receivable Dr 650          Uncollectible Amount Cr 650 ( to reverse write off of Sue Land) 5-Oct Cash Dr 650                 Account Receivable Cr 650 ( To record collection from Sue Land)

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