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: Apr. 13. Wrote off account of Dean Sheppard, $3,080. May 15. Received $1,540 as partial payment on the $4,100 account of Dan Pyle. Wrote off the remaining balance as uncollectible. July 27. Received $3,080 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash receipt. Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry): Paul Chapman Duane DeRosa $2,060 1,540 Teresa Galloway 920 Ernie Klatt Marty Richey 1,290 460 Dec. 31 If necessary, record the year-end adjusting entry for uncollectible accounts. If no entry is required, select "No Entry" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. a. Journalize the transactions under the direct write-off method. Apr. 13 May 15 38 If no entry is required, select "No Entry" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. a. Journalize the transactions under the direct write-off method. Apr. 13 May 15 July 27-reinstate July 27-collection Dec. 31-write-off July 27-collection Dec. 31-write-off Dec. 31-adjusting 00 00 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, 3% of credit sales are expected to be uncollectible. Shipway Company recorded $500,400 of credit sales during the year. Apr. 13 May 15 Drauinne Next eBook May 15 July 27-reinstate July 27-collection Dec. 31-write-off Dec. 31-adjusting Sign in Show Me How Print Item c. How much higher (lower) would Shipway Company's net income have been under the direct write-off method than under the allowance method? Check My Work by $ Previous Next