0 Required information Exercise 5-133 Compare the allowance method and the direct write-off method {LOIS-6} [The ioiiowing information appiies to the questions dispiayed beiowj At the beginning of Year 1, a company has a balance of $24,000 in accounts receivable. Because the company is a privately owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the end of Year 1, the company wishes to obtain a loan at the local bank, which requires the preparation of proper nancial statements. This means that the company now will need to use the allowance method. The following transactions occur during Year1 and Year 2. 1. During Year 1, install air conditioning systems on account, $170,000. 2. During Year 1, collect $165,000 from customers on account. 3. At the end of Year 1, estimate that uncollectible accounts total 10% of ending accounts receivable. 4. In Year 2, customers' accounts totaling $6,000 are written off as uncollectible. Exercise 5-133 Part 2 2. Record each transaction using the direct writeoff method. [If no entry is required for a particular transactionievent, select "No Journal Entry Required" in the first account eld.) View transaction list Journal entry worksheet During Year 1, install air conditioning systems on account, $1?D,DIJ(]. Note: Enter debits before credits. Record entry,r Clear entry View general journal View transaction list Journal entry worksheet 1 3 4 During Year 1, collect $165,000 from customers on account. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 Record entry Clear entry View general journalView transaction list Journal entry worksheet At the end of Year 1, estimate that uncollectible accounts total 10% of ending accounts receivable. Note: Enter debits before credits. Record entnr Clear entry View general journal View transaction list Journal entryr worksheet In Year 2, customers' accounts totaling $5,000 are written off as uncollectible. Note: Enter debits before cred its. Record entryr Clear entry View general journal