The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31, 2014:

June 8. Wrote off account of Kathy Quantel, $8,440.

Aug. 14. Received $3,000 as partial payment on the $12,500 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible.

Oct. 16. Received the $8,440 from Kathy Quantel, whose account had been written off on June 8. Reinstated the account and recorded the cash receipt.

Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry):

Wade Dolan...... $4,600

Greg Gagne...... 3,600

Amber Kisko....... 7,150

Shannon Poole..... 2,975

Niki Spence...... 6,630

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

a. Journalize the transactions for 2014 under the direct write-off method.

b. Journalize the transactions for 2014 under the allowance method, assuming that the allowance account had a beginning balance of $36,000 on January 1, 2014, and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable:

c. How much higher (lower) would Rustic Tables’ 2014 net income have been under the direct write-off method than under the allowancemethod?

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Aging Class (Number of Days Past Due) 0-30 days 31-60 days 61-90 days 91-120 days More than 120 days Receivables Balance Estimated Percent of Uncollectible Accounts on December 31 $320,000 110,000 24,000 18,000 43,000 $515,000 196 75 Total receivables