Entries for bad debt expense under the direct write-off and allowance methods.

Instructions Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel $24,400 Lee Drake 30,700 Jenny Green 29,800 Mike Lamb 17,800 Total $102,700 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 030 days $735,000 196 31-60 days 290,000 2 6190 days 115,000 15 91-120 days 70,000 More than 120 days 92,000 60 Total receivables $1,302,000 A. Journalize the write-offs under the direct write-off method. If no entry is required simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. B. Journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of $88,600 and the company uses the analysis of receivables method. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. C. How much higher (lower) would Seaforth International's net income have been under the allowance method than under the direct write-off method? CHART OF ACCOUNTS Seaforth International General Ledger REVENUE 410 Sales ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-Kim Abel OO Interest Revenue 122 Accounts Receivable-Lee Drake EXPENSES 510 Cost of Merchandise Sold 123 Accounts Receivable-Jenny Green 124 Accounts Receivable-Mike Lamb 520 Sales Salaries Expense 129 Allowance for Doubtful Accounts 521 Advertising Expense 131 Interest Receivable 522 Depreciation Expense-Store Equipment 132 Notes Receivable 528 Delivery Expense 141 Merchandise Inventory 524 Repairs Expense 145 Office Supplies 529 Selling Expenses 146 Store Supplies 680 Office Salaries Expense 531 Rent Expense 151 Prepaid Insurance 181 Land 582 Depreciation Expense-Office Equipment 693 Insurance Expense 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 584 Office Supplies Expense 686 Store Supplies Expense 686 Oredit Card Expense 194 Accumulated Depreciation-Office Equipment 527 Oash Short and Over LIABILITIES 588 Bad Debt Expense 889 Niscellaneous Expense 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 710 Interest Expense 214 Interest Payable 215 Notes Payable EQUITY 310 Common Stook 311 Retained Earnings 312 Dividends Journal A. On December 31, journalize the write-offs under the direct write-off method. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF: DEBIT CREDIT LIABILITIES EQUITY B. On December 31, journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of $88,600 and the company uses the analysis of receivables method. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. ROC DEBIT CREDIT ASSETS LIABILITIES EQUITY 3 5 Final Question C. How much higher (lower) would Seaforth International's net income have been under the allowance method than under the direct write-off method? by S