On August 31, 2018, Orchard Floral Supply had a $175,000 debit balance in Accounts Receivable and a $7,000 credit balance in Allowance for Bad Debts. During September, Orchard made Sales on account, $520,000. Ignore Cost of Goods Sold. Collections on account, $582,000. Write-offs of uncollectible receivables, $5,000. Read the requirements. Accounts Receivable 175,000 582,000 Collections Aug. 31, 2018 Bal. Net credit sales Sep. 30, 2018 Bal. Allowance for Bad Debts Aug. 31, 15101010 2018 Bal. Adj. Bad Write-offs 5,000 15,600 debts Sep 30, 19 do 2018 Bal. 520,000 5,000 Write-offs 108,000 Bad Debt Expense Adj. Bad debts Sep. 30 2018 Bal. s e s. 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 Orchard 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 Orchard 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 Orchard report on its September 30, 2018, balance sheet under each of the two methods? Which amount is more realistic? Give your reason. Income Statement (Partial) Bad Debts Expense Allowance Method Direct Write-Off Method SD $ 40 Balance Sheet (Partial): Accounts receivable Less: Allowance for Bad Debts Allowance Method 14000 Direct Write-Off Method $ 1600 $ they ! ewance for Bad 8