Spangler Company wrote off the following accounts receivable as uncollectible for the first year of its operations
Question:
Spangler Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31, 2012:
Customer Amount
Will Boyette ..... $10,000
Stan Frey ....... 8,000
Tammy Imes ........ 5,000
Shana Wagner ..... 6,000
Total ....... $29,000
a. Journalize the write-offs for 2012 under the direct write-off method.
b. Journalize the write-offs for 2012 under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded $3,000,000 of credit sales during 2012. Based on past history and industry averages, 1½% of credit sales are expected to be uncollectible.
c. How much higher (lower) would Spangler Company’s 2012 net income have been under the direct write-off method than under the allowance method?
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...
Step by Step Answer:
a Bad Debt Expense 29000 Accounts Receivable x Will Boyette 10000 Accounts Re...View the full answer
