Applying the direct write-off method to account for uncollectiblesShawm Valley is an attorney in Los Angeles. Valley uses the direct write-off method to account for uncollectible receivables.On April 30, 2018, Valley’s accounts receivable totaled $1 9,000. During May, she revenue of $22,000 on the account and collected $15,000 on the account. She also wrote off uncollectible receivables of $1,100 on May 31, 2018.RequirementsUse the direct write-off method to journalize Valley’s write-off of the uncollectible receivables.What is Valley’s balance of Accounts Receivable on May 31, 2018?

Question
Asked Jan 4, 2020
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Applying the direct write-off method to account for uncollectibles

Shawm Valley is an attorney in Los Angeles. Valley uses the direct write-off method to account for uncollectible receivables.

On April 30, 2018, Valley’s accounts receivable totaled $1 9,000. During May, she revenue of $22,000 on the account and collected $15,000 on the account. She also wrote off uncollectible receivables of $1,100 on May 31, 2018.

Requirements

  1. Use the direct write-off method to journalize Valley’s write-off of the uncollectible receivables.
  2. What is Valley’s balance of Accounts Receivable on May 31, 2018?
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Expert Answer

Step 1

Direct write-off method:This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

Step 2

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