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McKinney & Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made credit sales of $1,600,000 in 2019. McKinney estimates 3.0% of its sales will be uncollectible.

At the end of the first quarter of 2020, McKinney & Co. reevaluates its receivables. McKinneys management decides that $7,900 due from Mangold Corporation will not be collectible. This amount was previously included in the allowance account.

On April 23, 2020, McKinney & Co. receives a check from Mangold Corporation for $7,900.

Required:

Prepare the journal entries for McKinney to record the collection of the account previously written off.

CHART OF ACCOUNTS
McKinney & Co.
General Ledger
ASSETS 111 Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings	REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense

Prepare the journal entries on April 23 for McKinney to record the collection of the account previously written off.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4

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