b. Journalize the write-offs and the year-end adjusting entry under the allowance method, as analysis of receivables method. If an amount box does not require an entry, leave it blank. Write-off Allowance for Doubtful Accounts Accounts Receivable-Kim Abel Accounts Receivable-Lee Drake Accounts Receivable-Jenny Green Accounts Receivable-Mike Lamb Adjustment, Bad Debt Expense Allowance for Doubtful Accounts 102,500 21,550 33,925 27,565 19,460 c. How much higher (lower) would Seaforth International's net income have been under the a Lower a. Journalize the write-offs under the direct write-off method. If an amount box does no Bad Debt Expense Accounts Receivable-Kim Abel Accounts Receivable-Lee Drake Accounts Receivable-Jenny Green Accounts Receivable-Mike Lamb 102,500 21.550 33,925 27,565 19.460 Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Kim Abel Lee Drake Jenny Green Mike Lamb Total Amount $21,550 33,925 27,565 19,460 $102,500 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) 0-30 days 31-60 days 61-90 days 91-120 days More than 120 days Total receivables Receivables Balance Estimated Percent of on December 31 Uncollectible Accounts $715,000 1% 310,000 102,000 76,000 97,000 $1,300,000 15 30 60 258 a. Journalize the write-offs under the direct write-off method. If an amount box does not require an entry, leave it blank. b. Journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning credit balance of $95,000 on January 1 and the company uses the analysis of receivables method. If an amount box does not require an entry, leave it blank. Write-off Allowance for Doubtful Accounts Accounts Receivable-Kim Abel Accounts Receivable-Lee Drake Accounts Receivableblenny Green Accounts Receivable Mike Lamb 33,925 27.565 19,460 13333 102.500 21.550 Adjustment Bad Debt Expense Allowance for Doubtful Accounts x x c. How much higher (lower) would Seaforth International's net income have been under the allowance method than under the direct write-off method? Lower x Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Kim Abel Amount $21,550 Lee Drake 33,925 Jenny Green 27,565 Mike Lamb 19,460 Total $102,500 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) 0-30 days 31-60 days 61-90 days 91-120 days More than 120 days Total receivables Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts. $715,000 1% 310,000 102,000 76,000 97,000 $1,300,000 15 30 60 2588 a. Journalize the write-offs under the direct write-off method. If an amount box does not require an entry, leave it blank. Bad Debt Expense 102.500 Accounts Receivable-Kim Abel Accounts Receivable-Lee Drake Accounts Receivable-Jenny Green Accounts Receivable-Mike Lamb 21.550 33.925 27.565 19,460