Illustrate the effects on the accounts and financial statements of the following transactions in the accounts of Valley Care & Supplies Co., a local hospital supply company that uses the direct write off method of accounting for uncollectible receivables:
March 18 Received $5,000 on an account and wrote off the remainder owed of $10,000 as uncollectible.
Aug. 29 Reinstated the account that had been written off on March 18 and received $10,000 cash in full payment.