Customer Amount Jackson $10,000 9,500 13,100 . Stanton C. Barton S. Fenton Total

Question

Customer Amount Jackson $10,000 9,500 13,100 . Stanton C. Barton S. Fenton Total $35,0 Required a) Journalize the write-offs for the curren ar under the direct write-off method write-offs for the current year under the all redit sales ) Journalize the owance method. Also, journalize the adjusting entry for un company made $2,400,000 o average for uncollectible receivables is ble receivables assuming the during the year and the industry collecti f credit sale:50% of credit sales. How much higher or lower would Morry Company's net income have been the direct writ e-off method than under the allowance method?

Explanation / Answer

a) Journal entry :

b) Journal entry :

Company's net income will be higher under direct write off method by $1000

Company's net income will be lower under allowance method by $1000

Date accounts & explanation debit credit Bad debt expense 35000 Account receivable 35000 (To record write off under direct method)

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