On March 31, Daisy Tennis Equipment had a $165,000 debit balance in Accounts Receivable. During April, Daisy Tennis Equipment had the following transactions:

■ Sales of $490,000, all on credit.

■ Collections on account, $425,000.

■ Write-offs of uncollectible receivables, $6,000.

Requirements 1. Assume that Daisy Tennis Equipment uses the allowance method to account for uncollectible accounts and that there was a $8,000 credit balance in the allowance account on March 31. Prepare journal entries to record sales, col¬ lections on account, and write-offs of uncollectible accounts for the month of April. Next, assuming that uncollectible accounts expense is estimated at 2% of credit sales, prepare the adjusting journal entry to record bad debts expense. Enter the beginning balances and post all April activity in T-accounts for Accounts Receivable, Allowance for Uncollectible Accounts, and Uncollectible Accounts Expense.

2. Suppose that instead of the allowance method, Daisy Tennis Equipment uses the direct write-off method to account for uncollectible receivables. Prepare journal entries to record sales, collections on account, and write-offs of uncollectible accounts for the month of April. Enter the beginning balances and post all April activity in T-accounts for Accounts Receivable and Uncollectible Accounts Expense.

3. What amount of Uncollectible Accounts Expense would Daisy Tennis Equipment report on its April income statement under each of the two methods? Which amount better matches expense with revenue? Give your reasoning.

4. What amount of net accounts receivable would Daisy Tennis Equipment report on its April 30 balance sheet under each of the two methods? Which amount is more realistic? Give your reasoning.