On August 31, 2018, Divine Floral Supply had a $135,000 debit balance in Accounts Receivable and a $5,400 credit balance in Allowance for Bad Debts. During September, Divine made: Sales on account, $530,000. Ignore Cost of Goods Sold. Collections on account, S573,000. Write-offs of uncollectible receivables, $6,000. Read the requirements. Requirement 1. Journalize all September entries using the allowance method. Bad Debts Expense was estimated at 2% of credit sales. Show all September activity in Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts). Begin by joumalizing all September entries using the allowance method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Sales on account, $530,000. Ignore Cost of Goods Sold. Date Sep. 30 Accounts and Explanation Collections on account, $573,000. Date Sep. 30 Debit Credit Accounts and Explanation Debit Credit Requirements 1. Journalize all September entries using the allowance method. Bad debts expense was estimated at 2% of credit sales. Show all September activity in Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts). 2. Using the same facts, assume that Divine 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, 2018. 3. What amount of Bad Debts Expense would Divine report on its September income statement under each of the two methods? Which amount better matches expense with revenue? Give your reason. 4. What amount of net accounts receivable would Divine report on its September 30, 2018, balance sheet under each of the two methods? Which amount is more realistic? Give your reason. Print Done