Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods
Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31:
The company prepared the following aging schedule for its accounts receivable on December 31:
|Aging Class (Number
of Days Past Due)
on December 31
|Estimated Percent of
|More than 120 days||97,000||60|
a. Journalize the write-offs under the direct write-off method. If an amount box does not require an entry, leave it blank.
b. Journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning credit balance of $95,000 on January 1 and the company uses the analysis of receivables method. For a compound transaction, if an amount box does not require an entry, leave it blank.
c. How much higher (lower) would Seaforth International's net income have been under the allowance method than under the direct write-off method?
Journal entry for the write-offs under the direct write-off method:
Journal entry for the write-offs under allowance method:
Adjusting entry f...
Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*See Solution
Q: Prepare Journal Entries in a Revenue Journal Horizon Consulting Company had the following transactio...
A: Requirement a:Recording of transactions in revenue journal.
Q: Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for portable game play...
A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of ...
Q: Required information [The following information applies to the questions displayed below.] Piere Imp...
A: Prepare the journal entry to record the purchase of inventory on account.
Q: Julio produces two types of calculator, standard and deluxe. The company is currently using a tradit...
A: Overhead: Overhead costs indicate the costs, that are used in business activities, but cannot be fix...
Q: At December 31, Year 5, Aaron Co. had the following property, plant, and equipment: Asset Fair Va...
A: Calculate carrying value of assets:
Q: Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to cal...
A: Activity rate: Under activity based costing method, the activities responsible for manufacturing a p...
Q: Acoma Co. has identified one of its cost pools to be quality control and has assigned $53,998 to tha...
A: Calculate activity rate.
Q: CVP analysis, income taxes. The Home Style Eats has two restaurants that are open 24 hours a day. Fi...
A: Given Information:Fixed Cost = $430,500Selling Price = $ 8.75Variable Cost = $3.5Income Tax rate = 3...
Q: 1. What are the advantages and disadvantages of offering credit? 2. What precautions should she take...
A: As the student has posted multiple questions and not specified which questions to be answered, the s...