Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods

Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31:

Customer		Amount
Kim Abel		$24,000
Lee Drake		32,700
Jenny Green		29,800
Mike Lamb		17,600
	Total	$104,100

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
0-30 days		$735,000		1	%
31-60 days		280,000		2
61-90 days		113,000		15
91-120 days		70,000		30
More than 120 days		95,000		60
Total receivables		$1,293,000

a. Journalize the write-offs under the direct write-off method. If an amount box does not require an entry, leave it blank.

		fill in the blank 6980f9ff1f87006_2	fill in the blank 6980f9ff1f87006_3
		fill in the blank 6980f9ff1f87006_5	fill in the blank 6980f9ff1f87006_6
		fill in the blank 6980f9ff1f87006_8	fill in the blank 6980f9ff1f87006_9
		fill in the blank 6980f9ff1f87006_11	fill in the blank 6980f9ff1f87006_12
		fill in the blank 6980f9ff1f87006_14	fill in the blank 6980f9ff1f87006_15

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 $89,700 and the company uses the analysis of receivables method. If an amount box does not require an entry, leave it blank.

		fill in the blank 10036b020f8f052_2	fill in the blank 10036b020f8f052_3
		fill in the blank 10036b020f8f052_5	fill in the blank 10036b020f8f052_6
		fill in the blank 10036b020f8f052_8	fill in the blank 10036b020f8f052_9
		fill in the blank 10036b020f8f052_11	fill in the blank 10036b020f8f052_12
		fill in the blank 10036b020f8f052_14	fill in the blank 10036b020f8f052_15
		fill in the blank 10036b020f8f052_17	fill in the blank 10036b020f8f052_18
		fill in the blank 10036b020f8f052_20	fill in the blank 10036b020f8f052_21

c. How much higher (lower) would Seaforth International's net income have been under the allowance method than under the direct write-off method? $fill in the blank 56d2b90acfa1fa6_2