TUTORIAL TEST 08 On August 31, 20X8, Bouquet Floral Supply had a $140,000 debit balance in Accounts Receivable and a $5,600 credit balance in Allowance for Bad Debts. During September, Bouquet made: Sales on account, $550,000. Ignore Cost of Goods Sold. Collections on account, $584,000. Write-offs of uncollectible receivables, $4,000. Instructions 1. Journalize all September entries using the allowance method. Bad debts expense was estimated at 2% of credit sales. Show the balance of all September activity in Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense ledgers at September 30, 20X8. 2. 3. Using the same facts, assume that Bouquet used the direct write-off method to account for uncollectible receivables. Journalize all September entries using the direct write-off method. Post to Accounts Receivable and Bad Debts Expense, and show their balances at September 30, 20X8. What amount of Bad Debts Expense would Bouquet report on its September income statement under each of the two methods? Which amount better matches expense with revenue? Give your reason.