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, $8,360.
May	15	Received $470 as partial payment on the $7,120 account of Dan Pyle. Wrote off the remaining balance as uncollectible.
July	27	Received $8,360 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	$2,375
		Duane DeRosa	3,560
		Teresa Galloway	4,665
		Ernie Klatt	1,260
		Marty Richey	1,795
	31	If necessary, journalize the year-end adjusting entry for uncollectible accounts.

Required:

	a. Journalize the transactions under the direct write-off method.
	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, 0.85% of credit sales are expected to be uncollectible. Shipway Company recorded $3,836,000 of credit sales during the year.
	c. How much higher (lower) would Shipway Companys net income have been under the direct write-off method than under the allowance method?