Delores Cooper operates Cooper Garden Designs. Most of her customers pay cash so she uses the direct write-off method to account for uncollectible accounts receivable. On May 3, 2020, she determined that the $3,450 account for Wilma Benz was uncollectible. During 2020, she had total credit sales of $349,000. The December 31, 2020, balance in accounts receivable was $62,000. Prepare the journal entry to record the May 3 write- off using the direct write-off method.

Analysis Component:

Delores wants to compare the effect of using the allowance method versus the direct write-off method for recording uncollectible accounts. If uncollected accounts were estimated at (a) 2% of credit sales or (b) 4% of outstanding accounts receivable, prepare a comparison of the effects on profit of using the allowance methods versus the direct write-off method.