Delores Cooper operates Cooper Garden Designs. Most of her customers pay cash so she uses the direct writeoff method to account for uncollectible accounts receivable. On May 3, 2020, she determined that the $3,350 account for Wilma Benz was uncollectible. During 2020, she had total credit sales of $339,000. The December 31, 2020, balance in accounts receivable was $60,000.

Required

Record the May 3 write-off using the direct write-off method.

Analysis Component: Delores wants to compare the effect of using the allowance method versus the direct write-off method for recording uncollectible accounts. If uncollectible accounts were estimated at (a) 2% of credit sales or (b) 4% of outstanding accounts receivable, prepare a comparison of the effects on profit of using the allowance methods versus the direct write-off method.