The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31 Apr. May 13 15 w 27 Dec 31 Wrote of account of Dean Sheppard, 58,360 Received 470 as partial payment on the $7,120 account of Dan Pyle. Wrote of the remaining balance as uncollectible Received $8.360 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash receipt. wrote the following accounts as uncollectible record as one journal entry: Paul Chapman Duane DeRosa Teresa Galloway Emie Klan Marty Richey necessary, record the year-end adjusting entry for collectible accounts $2.375 3.560 4,665 1.260 31 1,795 Required: A Journalize the transactions under the direct write-off method. I no entry is required simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of accounts B. Journace 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 collectible Shway Company recorded 9.806,000 of credit sales during the year. I no entry is required. simply skip to the next transaction. Refer to the Chart of Account for exact wording of accounts C. How much higher flower) would Shipway Company's net income have been under the direct write-off method than under the allowance method? CHART OF ACCOUNTS Shipway Company General Ledger REVENUE 410 Sales 610 Interest Revenue ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-Paul Chapman 122 Accounts Receivable-Duane DeRosa 123 Accounts Receivable-Teresa Galloway 124 Accounts Receivable-Emie Klatt 125 Accounts Receivable-Dan Pyle 126 Accounts Receivable-Marty Richey 127 Accounts Receivable-Dean Sheppard 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 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 A Journaize the transactions under the direct write of methodno entry is required simply skip to the next transaction Refer to the Chart of Accounts for exact wording of accounts JOURNAL ACCOUNTING EQUATION DATE Apr 13 POST, REF DENT 8.360.00 CREDIT ASSETS LABUTIES Q UITY May 15 8,360.00 DESCRIPTION Bad Debt Expense Accounts Receivable-Dean Sheppard Cash Bad Debt Expense Accounts Receivable-Dan Pyle Accounts Receivable-Dean Sheppard Bad Debt Expense 470.00 Accounts Receivable-Dean Sheppard Bad Debt Expense Accounts Receivable-Paul Chapman Accounts Receivable Duane Defesa Accounts Receivable-Teresa Galloway Accounts Receivable-Emek Journare the transactions under the allowance method Show Coman of credit 3. Journalize the transactions under the allowance method. Shipway Company uses the percent of credit od fast and industry averages 0.85% of credit sales are expected to be uncollectible Shipway Company recorded $3,836,000 of credit sales during for year. I no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of accounts PAGE 1 ACCOUNTING EQUATION JOURNAL ASSETS LAUTIES CREDIT UITY POST, REY DENT DESCRPTION Final Question C. How much higher flower) would Shipway Company's net income have been under the direct write-off method than under the allowance method