At December 31, 2007, the trial balance of Thews Company contained the following amounts before adjustment.

Debits Credits Accounts Receivable $400,000 Allowance for Doubtful Accounts $ 4,800 Sales 2,200,000 Instructions

(a) Based on the information given, which method of accounting for bad debts is Thews Company using—the direct write-off method or the allowance method? How can you tell?

(b) Prepare the adjusting entry at December 31, 2007, for bad debts expense assuming that the aging schedule indicates that $17,500 of accounts receivable will be uncollectible.

(c) Repeat part

(b) assuming that instead of a credit balance there is a $4,800 debit balance in the Allowance for Doubtful Accounts.

(d) During the next month, January 2008, a $5,000 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.

(e) Repeat part

(d) assuming that Thews uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.

(f) What type of account is the allowance for doubtful accounts? How does it affect how accounts receivable is reported on the balance sheet at the end of the accounting period?