Journalize the Following Transactions Using the Allowance Method of Accounting

question 23

Essay

Journalize the following transactions using the allowance method of accounting for uncollectible receivables.
April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400.
June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.
Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment.

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Definitions:

Average Variable Cost

The total variable costs (costs that change with production volume) divided by the number of units produced, representing the variable cost per unit.

Marginal Cost (MC)

Marginal Cost, abbreviated as MC, refers to the increase in total production cost that arises from producing an additional unit of output, emphasizing the concept of optimizing production levels.

Average Total Cost (ATC)

The total cost divided by the quantity of output produced, representing the per-unit cost of production.

Marginal Revenue (MR)

The additional financial gain a firm secures by selling one more unit of its product or service.