At the beginning of 2012, Brad's Heating & Air (BHA) has a balance of $25,000 in accounts
Question:
a. During 2012, install air conditioning systems on account, $180,000.
b. During 2012, collect $175,000 from customers on account.
c. At the end of 2012, estimate that uncollectible accounts total 20% of ending accounts receivable.
d. In 2013, customers' accounts totaling $7,000 are written off as uncollectible.
Required:
1. Record each transaction using the allowance method.
2. Record each transaction using the direct write-off method.
3. Calculate the difference in net income (before taxes) in 2012 and 2013 between the two methods.
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Related Book For
Financial Accounting
ISBN: 9780078110825
2nd Edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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