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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
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 of account of Dean Sheppard, 58,450. May 15 Received $500 as partial payment on the $7,100 account of Dan Pyle. Wrote of the remaining balance as uncollectible Received $8,450 from Dean Sheppard, whose account had been written off on April 13, Reinstated the account and recorded the cash July 27 receipt Dec. 31. Wrote off the following accounts as uncollectible (record as one Journal entry) Paul Chapman $2,225 Duane De Rosa 3.550 Teresa Galloway 4,770 Emie Klatt 1,275 Marty Richey 1,690 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 Bad Debt Espense Accounts Payable Dean Sheppard May 15 Cash Bad Debt Expense Accounts Payable Dan Pyle HI ebook Show Me How July 27.reinstate Accounts Payable-Dean Sheppard Bad Debt Expense July 27-collection Cash Accounts Payable-Dean Sheppard Dec 31-write-off Bad Debt Expense Accounts Receivable-Paul Chapman Accounts Receivable-Duane DeRosa Im111 0 I III I I Dec. 31adjusting 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, 3/4% of credit sales are expected to be uncollectible, Shiway recorded $3,770,000 of credit sales during the year Apr. 13 May 15 WI eBook Show Me How May 15 July 27-reinstate July 27-collection 1 III bil. I w I II Dec 31-write-off Dec. 31-adjusting 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 Nav 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
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