Award: $6\mathrm{.}00$ points

Exercise $8-14$ Direct write$-$off method LO$3$

Delores Cooper operates Cooper Garden Designs. Most of her customers pay cash so she uses the direct write$-$off method to account for

uncollectible accounts receivable. On May $3,2023,$ she determined that the $$3,350$ account for Wilma Benz was uncollectible. During $2023,$ she had

total credit sales of $$339,000.$ The December $31,2023,$ balance in accounts receivable was $$60,000.$

Required:

Prepare journal entries to record the May $3$ write$-$off using the direct write$-$off method.

View transaction list

Journal entry worksheet

Record to write$-$off an uncollectible receivable using the direct write$-$off

method.

Note: Enter debits before credits.

Record entry

Clear entry

View general journal

Analysis Component:

Delores wants to compare the effect of using the allowance method versus the direct write$-$off method for recording uncollectible accounts. If

uncollectible accounts were estimated at $($a$)2\%$ of credit sales or $($b$)4\%$ of outstanding accounts receivable, prepare a comparison of the effects on

profit of using the allowance methods versus the direct write$-$off method.

a$.$ Using $2\%$ of credit sales

$\backslash$table$[[$Effect on profit,$],[,],[,],[$by$,]]$

b$.$ Using $4\%$ of outstanding accounts receivable

Effect on profit

by