Isner Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31, 2010:

Customer                   Amount

L. Hearn                      $10,000

Carrie Murray               9,500

Kelly Salkin                 13,100

Shana Wagnon             2,400

Total                            $35,000

a. Journalize the write-offs for 2010 under the direct write-off method.

b. Journalize the write-offs for 2010 under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded $2,400,000 of credit sales during 2010. Based on past history and industry averages, 13⁄4% of credit sales are expected to be uncollectible.

c. How much higher (lower) would Isner Company’s 2010 net income have been under the direct write-off method than under the allowance method?