Question: Casebolt Company wrote off the following accounts receivable as uncollectible

Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31, 2014:
Customer Amount
Shawn Brooke....... $ 4,650
Eve Denton ....... 5,180
Art Malloy ....... 11,050
Cassie Yost ....... 9,120
Total ........... $30,000

a. Journalize the write-offs for 2014 under the direct write-off method.
b. Journalize the write-offs for 2014 under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded $5,250,000 of credit sales during 2014. Based on past history and industry averages, ¾% of credit sales are expected to be uncollectible.
c. How much higher (lower) would Casebolt Company’s 2014 net income have been under the direct write-off method than under the allowance method?




Sale on SolutionInn
Sales5
Views335
Comments
  • CreatedFebruary 28, 2014
  • Files Included
Post your question
5000