Question: Allowance Method versus Direct Write - Off Method On April 1 2 , Mitch Company declared a $ 2 , 0 0 0 account receivable

Allowance Method versus Direct Write-Off Method
On April 12, Mitch Company declared a $2,000 account receivable from the Ward Company as uncollectible and wrote off the account. On December 5, Mitch received a $600 payment on the account from Ward.
a. Assume that Mitch uses the allowance method of handling credit losses. Prepare the journal entries to record the write-off and the subsequent recovery of Ward's account.
b. Assume that Mitch uses the direct write-off method of handling credit losses. Prepare the journal entries to record the write-off and the subsequent recovery of Ward's account.
c. Assume that the payment from Ward arrives on the following January 18, rather than on December 5 of the current year. (1) Prepare the journal entries to record the write-off and subsequent recovery of Ward's account under the allowance method. (2) Prepare the journal entries to record the write-off and subsequent recovery of Ward's account under the direct write-off method.
a.
\table[[Date,General Journal Description,Debit,Credit],[April.12,,0,0],[,,0,0],[,To write off the Ward Company account.,,],[Dec.5,,0,0],[,,0,0],[,To reinstate the Ward Company account.,,],[Dec.5,,0,0],[,,0,0],[,To record remittance.,,]]
Allowance Method versus Direct Write - Off Method

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