Entries under Direct Write-Off Method

A retailer uses the direct write-off method. Record the following transactions.

Feb. 14 The retailer determines that it cannot collect $400 of its accounts receivable from a customer named ZZZ Company.

Apr. 1 ZZZ Company unexpectedly pays its account in full to the retailer, which then records its recovery of this bad debt. Post the balance from the entries into T-accounts and solve Part 2 and Part 3. Please Use The Excel Template Below.

Part 2

Current Assets

Accounts Receivable

Less Allowance For Doubtful Accounts

Part 3

Current Assets

Accounts Receivable

Less Allowance For Doubtful Accounts

Feb. 14	Bad Debts Expense	400
	Accounts Receivable - ZZZ Co.		400
	Write off an account.
Apr. 1	Accounts Receivable - ZZZ Co.	400
	Bad Debts Expense		400
	Reinstate an account previously written off.
Apr. 1	Cash	400
	Accounts Receivable - ZZZ Co.		400
	Record cash received on credit.

Part 2 Part 3 Current assets Less allowance for doubtful accounts Part 3 Current assets Accounts receivable Less allowance for doubtful accounts \begin{tabular}{l|l|lll} P5-1A & P6-1A & P9-2A & + \\ \hline \end{tabular} Part 2 Part 3 Current assets Less allowance for doubtful accounts Part 3 Current assets Accounts receivable Less allowance for doubtful accounts \begin{tabular}{l|l|lll} P5-1A & P6-1A & P9-2A & + \\ \hline \end{tabular}