1. Writing Off Accounts Receivable

   Quantum Technologies, a computer consulting firm, has decided to write off the $37,675 balance of an account owed by a customer. Illustrate the effects on the accounts and financial statements of recording the write-off based on the following assumptions:

   If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

   (a) Assuming that the direct write-off method is used:

   		Balance Sheet
   		Assets			=	Liabilities	+	Stockholders' Equity
   			+		=		+
   		fill in the blank 5		fill in the blank 6		fill in the blank 7		fill in the blank 8
   	Statement of Cash Flows					Income Statement
   		fill in the blank 10						fill in the blank 12

   (b) Assuming that the allowance method is used:

   		Balance Sheet
   		Assets			=	Liabilities	+	Stockholders' Equity
   			-		=		+
   		fill in the blank 17		fill in the blank 18		fill in the blank 19		fill in the blank 20
   	Statement of Cash Flows					Income Statement