Part 2: A/R:=> Bad debt expense: Direct method > < allowance method 1. Allowance method: Construction of Acc Allowance for DD (Beg balances Cr, Dr 2. Compare advantages, disadvantages of direct write off method > < Allowance Hanoi Company provides for Doubtful Account based on 4% of gross Account Receivable. The following data is available for 2020 Credit sales during 2020 Account Receivable $6,400,000 2,700,000 Allowance for Doubtful Accounts (1/1/2020) 1,500 Collections of accounts written off in prior year (Customers credit was re-established) 9,000 Customer accounts written off as uncollectibles during 2020 40,000 a. Make the adjusting entry to record the Allowance for Doubtful Account on December 31, 2020 b. Repeat part a, assuming that Allowance for Doubtful Account has the balance of 5,000 debit as of 1/1/2020. c. According to part a, what is the balance for Cash Realizable Value as of December 31, 2020? d. Discuss the reasons why the allowance method is preferrable to direct write-off method