On May 31, Don's Humidor, Inc., had a \$219,000 debit balance in Accounts Receivable. During June the company had sales revenue of \(\$ 789,000\), which included \(\$ 640,000\) in credit sales. Other data for June include:

- Collections on accounts receivable, \(\$ 599,400\)

- Write-offs of uncollectible receivables, \(\$ 8,900\)

\section*{Required}

1. Record uncollectible-account expense for June by the direct write-off method. Show all June activity in Accounts Receivable and Uncollectible-Account Expense.

2. Record uncollectible-account expense and write-offs of customer accounts for June by the alLowance method. Show all June activity in Accounts Receivable, Allowance for Uncollectible Accounts, and Uncollectible-Account Expense. The May 31 unadjusted balance in Allowance

for Uncollectible Accounts was \(\$ 2,800\) (credit). Uncollectible-Account Expense was estimated at 2 percent of credit sales.
3. What amount of uncollectible-account expense would Don's Humidor, Inc., report on its June income statement under the two methods? Which amount better matches expense with revenue? Give your reason.
4. What amount of net accounts receivable would Don's Humidor, Inc., report on its June 30 balance sheet under the two methods? Which amount is more realistic? Give your reason.
5. How will what you learned in this problem help you manage a business?