Instructions The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: June B Wrote off account of Kathy Quantel, $8,450. Aug. 14 Received $3,000 as partial payment on the $12,510 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible. Oct 16 Received the $8,450 from Kathy Quantel, whose account had been written off on June 8. Reinstated the account and recorded the cash receipt. Dec. 31 Wrote off the following accounts as uncollectible (record as one journal entry): Wade Dolan Greg Gagne Amber Kisko Shannon Poole Niki Spence $4,560 3,560 7,165 2,975 6.585 31 If necessary, record the year-end adjusting entry for uncollectible accounts. Rustic Tables Company prepared the following aging schedule for its accounts receivable: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 0-30 days 31-60 days 61-90 days 91-120 days More than 120 days Total receivables $320,400 106,000 23,500 17,500 1% 3 10 32 33 43,500 73 $510,900 Required: a. Journalize the transactions under the direct write-off method. b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $35,000 and the company uses the analysis of receivables method. c. How much higher (lower) would Rustic Tables' net income have been under the direct write-off method than under the allowance method? Ir Chart of Accounts T CHART OF ACCOUNTS Rustic Tables Company General Ledger ASSETS 110 Cash 111 Petty Cash 1 121 Accounts Receivable-Wade Dolan 122 Accounts Receivable-Greg Gagne 123 Accounts Receivable-Amber Kisko 124 Accounts Receivable-Rosalie Oakes 125 Accounts Receivable-Shannon Poole 126 Accounts Receivable-Kathy Quantel 127 Accounts Receivable-Niki Spence 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Store Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 530 Office Salaries Expense 531 Rent Expense 532 Depreciation Expense-Office Equipment Ir Chart of Accounts T 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 10 General Journal General Journal Instructions a. Journalize the transactions under the direct write-off method. DATE DESCRIPTION PAGE 1 ACCOUNTING EQUATION JOURNAL POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY General Journal 10 11 12 11 24 15 b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $35,000 and the company uses the analysis of receivab method DATE DESCRIPTION PAGE 1 JOURNAL ACCOUNTING EQUATION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY General Journal 2 5 6 10 11 12 33 14 15 16 17