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Aug. 14 Oct. 16 16 Dec. 31 31 Accounts Receivable - Wade Dolan Accounts Receivable - Greg Gagne Accounts Receivable - Amber Kisko Accounts Receivable
Aug. 14 Oct. 16 16 Dec. 31 31 Accounts Receivable - Wade Dolan Accounts Receivable - Greg Gagne Accounts Receivable - Amber Kisko Accounts Receivable - Rosalie Oakes Accounts Receivable - Shannon Poole Accounts Receivable - Kathy Quantel Accounts Receivable - Niki Spence Allowance for Doubtful Accounts Bad Debt Expense Cash No journal entry required. Allowance method Direct write-off method Difference Aug. 14 Oct. 16 16 Dec. 31 31 Accounts Receivable - Wade Dolan Accounts Receivable - Greg Gagne Accounts Receivable - Amber Kisko Accounts Receivable - Rosalie Oakes Accounts Receivable - Shannon Poole Accounts Receivable - Kathy Quantel Accounts Receivable - Niki Spence Allowance for Doubtful Accounts Bad Debt Expense Cash No journal entry required. Allowance method Direct write-off method Difference \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Allowance Method } \\ \hline \multirow{2}{*}{\begin{tabular}{c} Aging Class \\ (Number of Days Past Due) \end{tabular}} & \multirow{2}{*}{\multicolumn{2}{|c|}{\begin{tabular}{c} Receivables Balance \\ on December 31 \end{tabular}}} & \multicolumn{2}{|c|}{ Estimated Doubtful Accounts } \\ \hline & & & Percent & Amount \\ \hline 030 days & & 320,000 & 1% & \\ \hline 3160 days & & 110,000 & 3% & \\ \hline 6190 days & & 24,000 & 10% & \\ \hline 91120 days & & 18,000 & 33% & \\ \hline More than 120 days & & 43,000 & 75% & \\ \hline Total & & 515,000 & & \\ \hline Unadjusted credit balance of allowance account & & & & \\ \hline Adjustment & & & & \\ \hline \end{tabular} c. Bad debt expense under: Allowance method Direct write-off method Difference vables history and industry averages, 36 of credit sales are expected to be uncollectible. Shipway recorded $3,778,000 of credit sales during the year. c. How much higher (lower) would Shipway Company's net income have been under the direct write-off method than under the allowance method? EX 8-14 Entries for bad debt expense under the direct write-off and allowance 0b,5 methods The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31 : June 8. Wrote off account of Katty Quantel 58,440 . Aug. 14. Received $3,000 as partial payment on the $12,500 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible. Oct. 16. Received the 58,440 from Kathy Ouantet, whose account had been written off on June 8 , Reinstated the account and recorded the cash receipt. Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry): 31. If necessary, record the year end adjusting entry for uncollectible accounts. a. Journalize the transactions under the direct write-off method. b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $36,000 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: c. How much higher (lowet) would Rustic Tables' net income have been under the direct write-off method than under the allowance method? EX 8-15 Effect of doubtul accounts on net income During its first year of operations, Mack's Plumbing Supply Co. had sales of $6,740,000, wrotr off $8,600 of accounts as uncollectible using the direct write-off method, and reported act income of $712,500. Determine what the net income would have been if the allowance method Aug. 14 Oct. 16 16 Dec. 31 31 Accounts Receivable - Wade Dolan Accounts Receivable - Greg Gagne Accounts Receivable - Amber Kisko Accounts Receivable - Rosalie Oakes Accounts Receivable - Shannon Poole Accounts Receivable - Kathy Quantel Accounts Receivable - Niki Spence Allowance for Doubtful Accounts Bad Debt Expense Cash No journal entry required. Allowance method Direct write-off method Difference Aug. 14 Oct. 16 16 Dec. 31 31 Accounts Receivable - Wade Dolan Accounts Receivable - Greg Gagne Accounts Receivable - Amber Kisko Accounts Receivable - Rosalie Oakes Accounts Receivable - Shannon Poole Accounts Receivable - Kathy Quantel Accounts Receivable - Niki Spence Allowance for Doubtful Accounts Bad Debt Expense Cash No journal entry required. Allowance method Direct write-off method Difference \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Allowance Method } \\ \hline \multirow{2}{*}{\begin{tabular}{c} Aging Class \\ (Number of Days Past Due) \end{tabular}} & \multirow{2}{*}{\multicolumn{2}{|c|}{\begin{tabular}{c} Receivables Balance \\ on December 31 \end{tabular}}} & \multicolumn{2}{|c|}{ Estimated Doubtful Accounts } \\ \hline & & & Percent & Amount \\ \hline 030 days & & 320,000 & 1% & \\ \hline 3160 days & & 110,000 & 3% & \\ \hline 6190 days & & 24,000 & 10% & \\ \hline 91120 days & & 18,000 & 33% & \\ \hline More than 120 days & & 43,000 & 75% & \\ \hline Total & & 515,000 & & \\ \hline Unadjusted credit balance of allowance account & & & & \\ \hline Adjustment & & & & \\ \hline \end{tabular} c. Bad debt expense under: Allowance method Direct write-off method Difference vables history and industry averages, 36 of credit sales are expected to be uncollectible. Shipway recorded $3,778,000 of credit sales during the year. c. How much higher (lower) would Shipway Company's net income have been under the direct write-off method than under the allowance method? EX 8-14 Entries for bad debt expense under the direct write-off and allowance 0b,5 methods The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31 : June 8. Wrote off account of Katty Quantel 58,440 . Aug. 14. Received $3,000 as partial payment on the $12,500 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible. Oct. 16. Received the 58,440 from Kathy Ouantet, whose account had been written off on June 8 , Reinstated the account and recorded the cash receipt. Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry): 31. If necessary, record the year end adjusting entry for uncollectible accounts. a. Journalize the transactions under the direct write-off method. b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $36,000 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: c. How much higher (lowet) would Rustic Tables' net income have been under the direct write-off method than under the allowance method? EX 8-15 Effect of doubtul accounts on net income During its first year of operations, Mack's Plumbing Supply Co. had sales of $6,740,000, wrotr off $8,600 of accounts as uncollectible using the direct write-off method, and reported act income of $712,500. Determine what the net income would have been if the allowance method
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