Entries for Bad Debt Expense under the Direct Write-Off and Allowance Methods The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31: 13 Wrote off account of Dean Sheppard, 57,740. Received $3,870 as partial payment on the $10,290 account of Dan Pyle. Wrote May 15 off the remaining balance as uncollectible. 27. Received $7,740 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash receipt. Wrote off the following accounts as uncollectible (record as one journal entry): Paul Chama Teresa Galway 2.20 Marty Richey 1160 31. If necessary, record the year-end adjusting entry for the uncollectible accounts. if no entry is required, select "No entry" and leave the amount boxes blank. If an Jamount box does not require an entry, leave it blank. a. Journalize the transactions under the direct write-off method. b. Journalize the transactions under the allowance method. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 1% of credit sales are expected to be uncollectible. Shipway Company recorded $3,775,700 of credit sales during the LLLL b. Journalize the transactions under the allowance method. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 1% of credit sales are expected to be uncollectible. Shipway Company recorded $3,775,700 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? by $