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, $8,480. May 15. Received $4,240 as partial payment on the $11,280 account of Dan Pyle. Wrote off the remaining balance as uncollectible. July 27. Received $8,480 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 $5,680 Duane DeRosa 4,240 Teresa Galloway 2,540 Ernie Klatt 3,560 Marty Richey 1,270 Dec. 31 If necessary, record the year-end adjusting entry for uncollectible accounts. If no entry is required, select "No Entry" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. Question Content Area a. Journalize the transactions under the direct write-off method. Apr. 13 Bad Debt Expense Bad Debt Expense Accounts Receivable-Dean Sheppard Accounts Receivable-Dean Sheppard May 15 Cash Cash Bad Debt Expense Bad Debt Expense Accounts Receivable-Dan Pyle Accounts Receivable-Dan Pyle July 27-reinstate Accounts Receivable-Dean Sheppard Accounts Receivable-Dean Sheppard Bad Debt Expense Bad Debt Expense July 27-collection Cash Cash Accounts Receivable-Dean Sheppard Accounts Receivable-Dean Sheppard Dec. 31-write-off Bad Debt Expense Bad Debt Expense Accounts Receivable-Paul Chapman Accounts Receivable-Paul Chapman Accounts Receivable-Duane DeRosa Accounts Receivable-Duane DeRosa Accounts Receivable-Teresa Galloway Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie Klatt Accounts Receivable-Ernie Klatt Accounts Receivable-Marty Richey Accounts Receivable-Marty Richey Dec. 31-adjusting No Entry No Entry No Entry No Entry Feedback Area Feedback Remember that under the direct write-off method, Bad Debt Expense is not recorded until the customer's account is determined to be worthless. Under the allowance method once a customer's account is identified as uncollectible, it is written off against the allowance account. Question Content Area 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, 1% of credit sales are expected to be uncollectible. Shipway Company recorded $4,136,100 of credit sales during the year. Apr. 13 Allowance for Doubtful Accounts Allowance for Doubtful Accounts Accounts Receivable-Dean Sheppard Accounts Receivable-Dean Sheppard May 15 Cash Cash Allowance for Doubtful Accounts Allowance for Doubtful Accounts Accounts Receivable-Dan Pyle Accounts Receivable-Dan Pyle July 27-reinstate Accounts Receivable-Dean Sheppard Accounts Receivable-Dean Sheppard Allowance for Doubtful Accounts Allowance for Doubtful Accounts July 27-collection Cash Cash Accounts Receivable-Dean Sheppard Accounts Receivable-Dean Sheppard Dec. 31-write-off Allowance for Doubtful Accounts Allowance for Doubtful Accounts Accounts Receivable-Paul Chapman Accounts Receivable-Paul Chapman Accounts Receivable-Duane DeRosa Accounts Receivable-Duane DeRosa Accounts Receivable-Teresa Galloway Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie Klatt Accounts Receivable-Ernie Klatt Accounts Receivable-Marty Richey Accounts Receivable-Marty Richey Dec. 31-adjusting Bad Debt Expense Bad Debt Expense Allowance for Doubtful Accounts Allowance for Doubtful Accounts Feedback Area Feedback Partially correct Question Content Area c. How much higher (lower) would Shipway Companys net income have been under the direct write-off method than under the allowance method? by $fill in the blank 359d1b041f81fed_2 Feedback Area