Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31:

Customer...............................................Amount

Kim Abel...................................................$ 24,300

Lee Drake..................................................31,195

Jenny Green..............................................29,715

Mike Lamb................................................17,890

Total........................................................$103,100

The company prepared the following aging schedule for its accounts receivable on December 31:

a. Journalize the write-offs under the direct write-off method.

b. Journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of $89,000 and the company uses the analysis of receivables method.

c. How much higher (lower) would Seaforth International’s net income have been under the allowance method than under the direct write-off method?

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Aging Class (Number of Days Past Due) 0-30 days Estimated Percent of Uncollectible Accounts 1% Receivables Balance on December 31 $ 735,000 31-60 days 290,000 111,000 2 15 91-120 days More than 120 days Total receivables 70,000 30 60 94,000 $1,300,000