On August 31, 2018, Gibson Floral Supply had a $175,000 debit balance in Accounts Receivable and a $7,000 credit balance in Allowance for Bad Debts. During September, Gibson made: Sales on account, $530,000. Ignore Cost of Goods Sold. . Collections on account, $573,000. Write-offs of uncollectible receivables, $8,000 Read the requirements. Requirement 1. Journalize all September entries using the allowance method. Bad Debts Expense was estimated at 1% 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 journalizing 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 Accounts and Explanation Debit Credit Sep 30 Collections on account, $573,000 Date Accounts and Explanation Debit Credit Sep 30 Write-offs of uncollectible receivables, $8,000. Date Accounts and Explanation Debit Credit Sep. 30 Journalize the Bad Debts Expense for September using the allowance method. Bad Debts Expense was estimated at 1% of credit sales. Date Accounts and Explanation Debit Credit Sep 30 Post all September entries in the appropriate T-accounts and calculate the ending balance in each account. (Enter the beginning balance if applicable. Then post the transactions and calculate the account balance at September 30, 2018.) Accounts Receivable Allowance for Bad Debts Bad Debt Expense Requirement 2. Using the same facts, assume that Gibson 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. Begin by journalizing all September entries using the direct write-off 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 Accounts and Explanation Debit Credit Sep. 30 Collections on account, $573,000. Date Accounts and Explanation Debit Credit Sep 30 Write-offs of uncollectible receivables, $8,000. Date Accounts and Explanation Debit Credit Sep. 30 Post to Accounts Receivable and Bad Debts Expense and show their balances at September 30, 2018. (Enter the beginning balance if applicable. Then post the transactions and calculate the account balance at September 30, 2018.) Accounts Receivable Bad Debt Expense Requirement 3. What amount of Bad Debts Expense would Gibson report on its September income statement under each of the two methods? Which amount better matches expense with revenue? Give your reason. Enter the amount of bad debt expense Gibson would report on its September 30, 2018 income statement under each of the two methods. Allowance Method Direct Write-Off Method Income Statement (Partial) Bad Debts Expense Bad Debts Expense under the better matches expense with revenue because the expense is recorded Requirement 4. What amount of net accounts receivable would Gibson report on its September 30, 2018, balance sheet under each of the two methods? Which amount is more realistic? Give your reason. Enter the amount of net accounts receivable Gibson would report on its September balance sheet under each of the two methods. (Complete all answer boxes. For accounts with a 50 balance, make sure to enter "0" in the appropriate colum Allowance Method Direct Write-Off Method Balance Sheet (Partial): Accounts receivable Less: Allowance for Bad Debts Net accounts receivable under the is more realistic because it shows the amount of the receivables that the company