Acme Cell Phones had a debit balance in accounts receivable of $100,000 on January 1, 2014. Acme sold $80,000 of merchandise to Brodie Trucking Company on account. Brodie paid only $56,000 of the account receivable. After repeated attempts to collect, Acme finally wrote off its accounts receivable from Brodie. Six months later, Acme received Brodie's cheque for $24,000 with a note apologizing for the late payment.
Required
1. Journalize the following for Acme Cell Phones:
a. Sale on account, $80,000 (ignore cost of goods sold).
b. Collection of $56,000 on account.
c. Write-off of the remaining portion of the Brodie account receivable. Acme Performance uses the allowance method for uncollectibles.
d. Reinstatement of Brodie's account receivable.
e. Collection in full from Brodie, $24,000.
2. Repeat c., d., and e. using the direct write-off method.
3. What amount of net Accounts Receivable would Acme Cell Phones report on its December 31, 2014, balance sheet under the direct write-off method? Does Acme expect to collect this much of the receivable? Give your reasons.