At December 31, 2001, the trial balance of John Gleason Company contained the following amounts before adjustment:

Instructions

(a) Prepare the adjusting entry at December 31, 2001, to record bad debt expense assuming that the aging schedule indicates that $16,750 of accounts receivable will be uncollectible.

(b) Repeat part

(a) assuming that instead of a credit balance there is a $1,500 debit balance in the Allowance for Doubtful Accounts.

(c) During the next month, January 2002, a $4,500 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.

(d) Repeat part

(c) assuming that John Gleason Company uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.
> What are the advantages of using the allowance method in accounting for uncollectible accounts as compared to the direct write-off method?

Transcribed Image Text:

Accounts Receivable Allowance for Doubtful Accounts Sales Debits Credits $350,000 $ 1,500 875,000