At December 31, 2014, the trial balance of Markowitz Company contained the following amounts before adjustment. Instructions

Question:

At December 31, 2014, the trial balance of Markowitz Company contained the following amounts before adjustment.

P9-5B At December 31, 2014, the trial balance of Markowitz

Instructions
(a) Prepare the adjusting entry at December 31, 2014, to record bad debt expense under each of the following independent assumptions.

(1) An aging schedule indicates that $13,500 of accounts receivable will be uncollectible.

(2) The company estimates that 2% of sales will be uncollectible.

(b) Repeat part (a) assuming that instead of a credit balance, there is a $1,100 debit balance in Allowance for Doubtful Accounts.

(c) During the next month, January 2015, a $3,200 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.

(d) Repeat part (c) assuming that Markowitz Company uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.

(e) What are the advantages of using the allowance method in accounting for uncollectible accounts as compared to the direct write-offmethod?

Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...