Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Method

The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31:

June 8.	Wrote off account of Kathy Quantel, $8,060.
Aug. 14.	Received $5,720 as partial payment on the $14,430 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible.
Oct. 16.	Received the $8,060 from Kathy Quantel, which had been written off on June 8. Reinstated the account and recorded the cash receipt.
Dec. 31.	Wrote off the following accounts as uncollectible (record as one journal entry):

Wade Dolan	$2,340
Greg Gagne	1,450
Amber Kisko	5,560
Shannon Poole	3,220
Niki Spence	890

Dec. 31 If necessary, record the year-end adjusting entry for the uncollectible accounts. The company prepared the following aging schedule for its accounts receivable:

Aging Class (Number of Days Past Due)									Receivables Balance on December 31				Estimated Percent of Uncollectible Accounts
								0-30 days	$387,000				1	%
								31-60 days	145,000				9
								61-90 days	46,000				20
								91-120 days	17,000				55
								More than 120 days	23,000				85
								Total receivables	$618,000

For those amount boxes in which no entry is required, leave the box blank. If an account is not required, select "No entry" from the dropdown box(es).

a. Journalize the transactions under the direct write-off method.

Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Method The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: June 8. Wrote off account of Kathy Quantel, $8,060. Aug. 14. Received $5,720 as partial payment on the $14,430 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible. Oct. 16. Received the $8,060 from Kathy Quantel, which had been written off on June 8. Reinstated the account and recorded the cash receipt. Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry): Wade Dolan $2,340 1,450 Greg Gagne Amber Kisko 5,560 Shannon Poole 3,220 Niki Spence 890 If necessary, record the year-end adjusting entry for the uncollectible accounts. Dec. 31 The company prepared the following aging schedule for its accounts receiva ble: Aging Class (Number Receivables Balance Estimated Percent of of Days Past Due) on December 31 Uncollectible Accounts $387,000 0-30 days 1% 31-60 days 145,000 61-90 days 46,000 20 91-120 days 55 17,000 More than 120 days 23,000 85 $618,000 Total receivables For those amount boxes in which no entry is required, leave the box blank. If an account is not required, select "No entry" from the dropdown box(es). a. Journalize the transactions under the direct write-oft method. June 8 Aug. 14 Oct. 16-reinstate Oct. 16-collection Dec. 31-write-off Dec. 31-adjusting b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $24,180 at the beginning of the year and the company uses the analysis of receivables method. . Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance receivables method. $24,180 the beginning of the year and the company uses the analysis June 8 Aug. 14 Oct. 16-reinstate Oct. 16-collectiom Dec. 31-write-off Dec. 31-adjusting c. How much higher (lower) would Rustic Tables' net income have been under the direct write-off method than under the allowance method? hy