1)Ante-Up, Inc. asks customers to sign short-term notes if they need time to pay for services that the firm provides, and uses the percentage of receivables method for its uncollectible accounts.Show the effects (including dollar amounts) of the following events on Ante-Up's assets, liabilities, and stockholders' equities.

a)On September 1, Ante-Up provided $5,000 of services for a client, Bill Payer, on account with the understanding that he would pay the bill by October 1.

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b)On October 1, Mr. Payer called to get more time to settle his account.Ante-Up accepted his 12%, 2-month note for $5,000 for the September work.

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c)On December 1, the note from Mr. Payer was paid in full.

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d)If the note had been dishonored on December 1, but the firm still expected that it would receive cash from Mr. Payer eventually, how would that affect Ante-Up?

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e)On December 15, Ante-Up wrote off the $1,500 account balance of one of its customers, N. O. Good, as uncollectible.

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f)Ante-Up uses the percentage of receivables method to estimate future bad debt.On December 31, Ante-Up made its year-end adjusting entry for future bad debt based on a $131,000 balance in Accounts Receivable and $1,700 remaining in the Allowance for Doubtful Accounts.The firm estimates that future bad debt will be 5% of Accounts Receivable.

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g)Lotta Loot, President of Ante-Up, does not understand why the firm uses an allowance method instead of the direct write-off method to account for its bad debt.Explain to her the differences between the two methods and the reasons that Ante-Up uses an allowance method.