Question
Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31, 2016: Customer Amount Shawn Brooke
Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31, 2016:
Customer | Amount |
Shawn Brooke | $ 4,650 |
Eve Denton | 5,180 |
Art Malloy | 11,050 |
Cassie Yost | 9,120 |
Total | $30,000 |
Required:
A. | On December 31, journalize the write-offs for 2016 under the direct write-off method. Refer to the Chart of Accounts for exact wording of account titles. |
B. | On December 31, journalize the write-offs for 2016 under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded $5,250,000 of credit sales during 2016. Based on past history and industry averages, % of credit sales are expected to be uncollectible. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. |
C. | How much higher (lower) would Casebolt Companys 2016 net income have been under the direct write-off method than under the allowance method? |
Chart of Accounts
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Journal
A. On December 31, journalize the write-offs for 2016 under the direct write-off method. Refer to the Chart of Accounts for exact wording of account titles.
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B. On December 31, journalize the write-offs for 2016 under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded $5,250,000 of credit sales during 2016. Based on past history and industry averages, % of credit sales are expected to be uncollectible. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.
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Final Question
C. How much higher (lower) would Casebolt Companys 2016 net income have been under the direct write-off method than under the allowance method?
by .
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