Allowance Method versus Direct Write-Off Method On April 12, Maddox Company, declared a $40,000 account receivable from the Ward Company as uncollectible and wrote off the account. On December 5, Maddox received a $28,000 payment on the account from Ward.

a. Assume that Maddox 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 Maddox 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 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.

General Journal
Date	Description	Debit	Credit
April.12
	To write off the Ward Company account.
Dec.5
	To reinstate the Ward Company account.
Dec.5
	To record remittance.

b.

General Journal
Date	Description	Debit	Credit
April 12
	To write off the Ward Company account.
Dec.5
	To reinstate the Ward Company account.
Dec.5
	To record remittance.

c.Part 1

General Journal
Date	Description	Debit	Credit
April 12
	To write off the Ward Company account.
Jan.18
	To reinstate the Ward Company account.
Jan.18
	To record remittance.

c.Part 2

General Journal
Date	Description	Debit	Credit
April 12
	To write off the Ward Company account.
Jan.18
	To reinstate the Ward Company account.
Jan.18
	To record remittance.