Journalizing transactions using the direct write off method and reporting receivables on the balance sheet High Performance Cell Phones sold $23,000 of merchandise to Anthony Trucking Company on account. Anthony fell on hard times and paid only $8,000 of the account receivable. After repeated attempts to collect, High Performance finally wrote off its accounts receivable from Anthony. Six months later High Performance received Anthony’s check for $15,000 with a note apologizing for the late payment.
Requirements
1. Journalize for High Performance:
a. Sale on account, $23,000. (Ignore cost of goods sold.)
b. Collection of $8,000 on account.
c. Write off of the remaining portion of Anthony’s account receivable. High Performance uses the direct write off method for un collectibles.
d. Reinstatement of Anthony’s account receivable.
e. Collection in full from Anthony, $15,000.
2. Show how High Performance would report receivables on its balance sheet after all entries have been posted.