At December 31, 2019, the trial balance of Darby Company contained the following amounts before adjustment. ______________________________________Debit

Question:

At December 31, 2019, the trial balance of Darby Company contained the following amounts before adjustment.
______________________________________Debit Credit
Accounts Receivable..............................$385,000
Allowance for Doubtful Accounts...............................$ 1,000
Sales Revenue......................................................970,000
Instructions
(a) Based on the information given, which method of accounting for bad debts is Darby Company using-the direct write-off method or the allowance method? How can you tell?
(b) Prepare the adjusting entry at December 31, 2019, for bad debt expense, assuming an indicates that $11,750 of will be uncollectible.
(c) Repeat part (b) assuming that instead of a credit balance there is a $1,000 debit balance in Allowance for Doubtful Accounts.
(d) During the next month, January 2020, a $3,000 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.
(e) Repeat part (d) assuming that Darby uses the direct write-off method instead of the allowance method in accounting for uncollectible What type of account is Allowance for Doubtful Accounts? How does it affect how is reported on the at the end of the accounting period?
Accounts Receivable
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