EX 8-3 Entries for Uncollectible Accounts, Using Direct SHOW ME HOW Write-Off Method Obj. 3 Journalize the following transactions in the accounts of Canyon River Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables: Reinstated the account of Dr. Kyle Norby that had been written off on June 2 and received $4,600 cash in full payment. EX 8-4 Entries for Uncollectible Receivables, Using SHOW ME HOW Allowance Method Obj. 4 Journalize the following transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: \begin{tabular}{|l|l|l|} \hline Dec. & 7. & \begin{tabular}{l} Reinstated the account of Old Town Cafe that had been \\ written off on September 30 and received $17,250 cash in \\ full payment. \end{tabular} \\ \hline \end{tabular} EX 8-5 Entries to Write off Accounts Receivable Obj. 3,4 Creative Solutions Company, a computer consulting firm, has decided to write off the $15,220 balance of an account owed by a customer, Wil Treadwell. Journalize the entry to record the write-off, assuming that (a) the direct write-off method is used and (b) the allowance method is used. At the end of the current year, the accounts receivable account has a debit balance of $1,935,000 and sales for the year total $26,710,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions: a. The allowance account before adjustment has a debit balance of $10,200. Bad debt expense is estimated at 1/2 of 1% of sales. b. The allowance account before adjustment has a debit balance of $10,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $175,000. c. The allowance account before adjustment has a credit balance of $25,760. Bad debt expense is estimated at 3/4 of 1% of sales. d. The allowance account before adjustment has a credit balance of $25,760. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $170,420. Outlaw Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31. EX 8-13 Entries for Bad Debt Expense under the Direct sHow ME HOW Write-Off and Allowance Methods Obj. 5 The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31: Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry): 31. If necessary, journalize the year-end adjusting entry for uncollectible accounts. a. Journalize the transactions under the direct write-off method. 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. Shipway recorded $3,778,000 of credit sales during the year. c. How much higher (lower) would Shipway Company's net income have been under the direct write-off method than under the allowance method