Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31 Customer Amount Kim Abel $ 21,550 Lee Drake 33,925 Jenny Green 27,565 Mike Lamb 19,460 Total $102,500 CHART OF ACCOUNTSSeaforth InternationalGeneral Ledger ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable Kim Abel 122 Accounts Receivable Lee Drake 123 Accounts Receivable Jenny Green 124 Accounts Receivable Mike Lamb 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation Store Equipment 193 Office Equipment 194 Accumulated Depreciation Office Equipment 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 313 Income Summary 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 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 A On December 31, journalize the write offs under the direct write off method If no entry is required, simply skip to the next transaction Refer to the Chart of Accounts for exact wording of account titles B On December 31, journalize the write offs and the year end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of $95,000 and the company uses the analysis of receivables method If no entry is required, simply skip to the next transaction Refer to the Chart of Accounts for exact wording of account titles C How much higher (lower) would Seaforth Internationals net income have been under the allowance method than under the direct write off method

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 18, 2024

Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31:

Customer

Amount

Kim Abel

$ 21,550

Lee Drake

33,925

Jenny Green

27,565

Mike Lamb

19,460

Total

$102,500

CHART OF ACCOUNTSSeaforth InternationalGeneral Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-Kim Abel
122	Accounts Receivable-Lee Drake
123	Accounts Receivable-Jenny Green
124	Accounts Receivable-Mike Lamb
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment

	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
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 A. On December 31, journalize the write-offs under the direct write-off method. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. B. On December 31, journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of $95,000 and the company uses the analysis of receivables method. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. C. How much higher (lower) would Seaforth Internationals net income have been under the allowance method than under the direct write-off method?