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Entries for bad debt expense under the direct write-off and allowance methods The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: a. Journalize the transactions under the direct write-off method. b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning credit balance of $36,000 on January 1 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’ net income have been under the direct write-off method than under the allowance method?

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Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 9, Problem 9.14EX
Textbook Problem

Entries for bad debt expense under the direct write-off and allowance methods

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

Chapter 9, Problem 9.14EX, Entries for bad debt expense under the direct write-off and allowance methods The following selected , example  1

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

    Chapter 9, Problem 9.14EX, Entries for bad debt expense under the direct write-off and allowance methods The following selected , example  2

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

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Chapter 9 Solutions

Accounting
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