Chapter 5 Homework - Graded Help Save & Exit 12 1.07 Required information Exercise 5-13A Compare the allowance method and the direct write-off method (LO5-6) The following information applies to the questions displayed below At the beginning of 2021. Brad's Heating & Air (BA) has a balance of $26,000 in accounts receivable. Because BHAI privately owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the end of 2021, BHA wishes to obtain a loan at the local bank, which requires the preparation of proper financial statements. This means that BHA now will need to use the allowance method. The following transactions occur during 2021 and 2022 1. During 2021, Install air conditioning systems on account, $190,000 2. During 2021, collect $185.000 from customers on account 3. At the end of 2021, estimate that uncollectible accounts to 15% of ending accounts receivable 4. In 2022, customers' accounts foting $8,000 are written off as uncollectible. Exercise 5-13A Part 3 3. Calculate bad debt expense for 2021 and 2022 under the allowance method and under the direct write-off method, prorto any adjusting entries. [Leave no cells blank.) References Allowance Direct Write Bad Debt Expense 2021