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 Dacamber 31: Apr. 13. Wrote off account of Dean Sheppard, $3,630. Dec. 31-adjucting No entry Fendhack Raceivad $1,820 as partial payment on the $4,830 account of Dan Pyla. Wrote off the remaining balance a May 15. uncollectible. July 27. Recaived $3,630 from Daan Shappard, whose account had boon written off on April 13. Rainstated the account b- Joumalize the transactions underthe allowance method. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on Aat bister and industry averages, 1% of credit sales are expected to be uncollectible. Shipway Company recorded $1,769,700 of credit sales dunng the year. and recorded the cash receipt. Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry) Paul Chapman $2.430 Duane DeRosa 1,820 Teresa Galloway 1.090 Ernic Klatt Marty Richay Allowance for Doubtful Accounts Accounts Receivable Dean Sheppard Apr. 13 1,520 BE 540 May 15 Dec, 31 If necessary, record the year end adjusting entry for uncollectible accounts. For those amount boxes in which no entry is required, leave the box blank. If an entry is not required, select "No entry from the dropdown bax(es) a. Journalize the transactions under the direct write-off method. uly 27-reinstate Accounts Reoeivable-Dean Allowwance for Doubtful Accounts Apr. 13 July 27-collection Cash Y Accounts Revable-Dean Sheppard May 15 Accounts Receivable Duane DeRosa July 27-reinstate Bad Debt Accounts Receivable-Ernie Katt July 27-colection Cash Accounts Receivable Dean Sheppard Dec. 31-odjustin Bad Debt Expense Dec. 31-write-off Allowance for Doubtful Accounts Account c. How much higher (lower) would Shipway Company's net income have been under the direct write off method than undar the allowance mathod? Accounts Receivable-Teresa Galloway Higher by