1. Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables: Oct. 2. Received $2,000 from John Smith and wrote off the remainder owed of $3,500 as uncollectible. DR DR $2000 $3,500 $ 5,500 Bad debt expence 3,500 CR A/B Jhon smith Dec. 20. Reinstated the account of Elita Ramirez and received $3,500 cash in full payment. DR AIR Elita Ramirez $3,500 DR CR Bad debt expense $3,500 Cash 83,500 CR AIR Elto Ramirez $3,500 2. Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $3,400,000, Allowance for Doubtful Accounts has a credit balance of $20,000, and sales for the year total $35,600,000. Bad debt expense is estimated at 1/2 of 1% of sales. Determine: (a)the amount of the adjusting entry for Uncollectible Accounts: ANSWER: 35,600,000 x 0,5 -178,000 (b)The adjusted balances of: Accounts Receivable: ANSWER 3,400,000 Allowance for Doubtful Accounts: ANSWER (178,mo+20,000) = 198,0 Bad Debt Expense: ANSWER $178,000 (c) the Net Realizable Value of Accounts Receivable: ANSWER AIR- ADC : 3.400,000 -198,000 = 3,202,000