Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Method 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 Kathy Quantel, $7.240. Aug. 14. Received $5,140 as partial payment on the $12,960 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible. Oct. 16. Received the $7,240 from Kathy Quantel, which 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): Wade Dolan Greg Gagne Amber Kisko $2,100 1,300 5,000 Shannon Poole Niki Spence 2,900 800 Dec. 31 If necessary, record the year-end adjusting entry for the uncollectible accounts Estimated Percent of Uncollectible Accounts The company prepared the following aging schedule for its accounts receivable: Aging Class (Number Receivables Balance of Days Past Due) on December 31 0-30 days $348,000 31-60 days 130,000 61-90 days 41,000 91-120 days 15,000 More than 120 days 21,000 Total receivables $555,000 3 % 9 25 45 90 a. Journalize the transactions under the direct write-off method. June 8 Bad Debt Expense Accounts Receivable-Kathy Quantel Aug. 14 Cash Bad Debt Expense Accounts Receivable-Rosalie Oakes Oct. 16-reinstate Accounts Receivable-Kathy Quantel Bad Debt Expense Oct. 16-collection Cash Accounts Receivable-Kathy Quantel IIII 1 QILI I Dec. 31-write-off Bad Debt Expense Accounts Receivable-Wade Dolan Accounts Receivable-Greg Gagne Accounts Receivable-Amber Kisko Accounts Receivable-Shannon Poole Accounts Receivable-Niki Spence Dec. 31-adjusting No entry No entry D. Journage the transactions under the allowance method, assuming that the allowance account had a beginning balance of $21,720 at the beginning of the year and the company uses the art of the method Allowance for Doubtful Accounts Accounts Receivable-Kathy Quantel Cash Allowance for Doubtful Accounts Accounts Receivable-Rosalie Cakes Oct. 16 reinstate Accounts Receivable Kathy Quantel Allowance for Doubtful Accounts Oct. 16 collection Cash Accounts Receivable-Kathy Quantel lll l l llI. i lll lllllll ( Dec 31 write-ot! Allowance for Doubtful Accounts Accounts Receivable-Wade Dolan Accounts Receivable-Greg Gagne Accounts Receivable-Amber Kisko Accounts Receivable-Shannon Poole Accounts Receivable Niki Spence Dec. 31.austing Bad Debt Expense Allowance for Doubtful Accounts Oct. 16-reinstate Accounts Receivable-Kathy Quantel Allowance for Doubtful Accounts Oct. 16-collection Cash Accounts Receivable-Kathy Quantel Dec 31-write-off Allowance for Doubtful Accounts Accounts Receivable-Wade Dolan 1 l ll1110 0 [ ] 111111 Accounts Receivable-Greg Gagne Accounts Receivable-Amber Kisko Accounts Receivable-Shannon Poole Accounts Receivable-Niki Spence Dec. 31-adjusting Bad Debt Expense Allowance for Doubtful Accounts c. How much higher Clower) would Rustic Tables' net income have been under the direct write-off method than under the allowance method? Higher by Check My Work 2 more Check My Work uses remaining
