The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31:

Apr. 13 Wrote off account of Dean Sheppard, $8,300.

May 15 Received $590 as partial payment on the $7,270 account of Dan Pyle. Wrote off the remaining balance as uncollectible.

July 27 Received $8,300 from Dean Sheppard, whose account had been written off on

April 13. Reinstated the account and recorded the cash receipt.

Dec. 31 Wrote off the following accounts as uncollectible (record as one journal entry): Paul Chapman $2,120 Duane DeRosa 3,590 Teresa Galloway 4,640 Ernie Klatt 1,310 Marty Richey 1,715

31 If necessary, record the year-end adjusting entry for uncollectible accounts.

Required:

A. Journalize the transactions 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.

A fits into 15 boxes that go date - descrpition - debit - credit

B. Journalize the transactions under the allowance method. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 0.80% of credit sales are expected to be uncollectible. Shipway Company recorded $3,828,000 of credit sales during the year. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

B fits into 17 boxes that fight into date - description - debit - credit

C. How much higher (lower) would Shipway Companys net income have been under the direct write-off method than under the allowance method?