Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31, 2014:

Question:

Customer Amount

Kim Abel ..... $ 21,550

Lee Drake .... 33,925

Jenny Green.... 27,565

Mike Lamb...... 19,460

Total....... $102,500

The company prepared the following aging schedule for its accounts receivable on December 31, 2014:

a. Journalize the write-offs for 2014 under the direct write-off method.

b. Journalize the write-offs and the year-end adjusting entry for 2014 under the allowance method, assuming that the allowance account had a beginning balance of $95,000 on January 1, 2014, and the company uses the analysis of receivables method.

c. How much higher (lower) would Seaforth International’s 2014 net income have been under the allowance method than under the direct write-off method?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...