Entries for Bad Debt Expense under the Direct Write Off and Allowance Methods The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31 Apr 13 Wrote off account of Dean Sheppard, $7,960 May 15 Received $3,980 as partial payment on the $10,590 account of Dan Pyle Wrote off the remaining balance as uncollectible July 27 Received $7,960 from Dean Sheppard, whose account had been written off on April 13 Reinstated the account and recorded the cash receipt Dec 31 Wrote off the following accounts as uncollectible (record as one journal entry) Paul Chapman $5,330 Duane DeRosa 3,980 Teresa Galloway 2,390 Ernie Klatt 3,340 Marty Richey 1,190 Dec 31 If necessary, record the year end adjusting entry for the uncollectible accounts For those amount boxes in which no entry is required, leave the box blank If an entry is not required, select No entry from the dropdown box(es) Question Content Area a Journalize the transactions under the direct write off method Apr 13 Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select May 15 Accounts Payable Dan PyleAccounts Receivable Dan PyleAllowance for Doubtful AccountsCashNo entrySales Select Select Accounts Payable Dan PyleAccounts Receivable Dan PyleAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales Select Select Accounts Payable Dan PyleAccounts Receivable Dan PyleAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select July 27 reinstate Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales Select Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select July 27 collection Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Dec 31 write off Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Accounts Payable Paul ChapmanAccounts Receivable Paul ChapmanAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Accounts Payable Duane DeRosaAccounts Receivable Duane DeRosaAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Accounts Payable Teresa GallowayAccounts Receivable Teresa GallowayAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales Select Select Accounts Payable Ernie KlattAccounts Receivable Ernie KlattAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Accounts Payable Marty RicheyAccounts Receivable Marty RicheyAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Dec 31 adjusting Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Question Content Area b Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense Based on past history and industry averages, 2 of credit sales are expected to be uncollectible Shipway Company recorded $1,941,400 of credit sales during the year Journalize the transactions under the allowance method Apr 13 Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select May 15 Accounts Payable Dan PyleAccounts Receivable Dan PyleBad Debt ExpenseCashNo entrySales Select Select Accounts Payable Dan PyleAccounts Receivable Dan PyleAllowance for Doubtful AccountsBad Debt ExpenseInterest RevenueNo entry Select Select Accounts Payable Dan PyleAccounts Receivable Dan PyleAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select July 27 reinstate Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales Select Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select July 27 collection Accounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashInterest RevenueNo entry Select Accounts Payable Dean SheppardAccounts Receivable Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Dec 31 write off Accounts Payable Paul ChapmanAccounts Receivable Paul ChapmanAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Accounts Payable Paul ChapmanAccounts Receivable Paul ChapmanAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Accounts Payable Duane DeRosaAccounts Receivable Duane DeRosaAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Accounts Payable Teresa GallowayAccounts Receivable Teresa GallowayAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Accounts Payable Ernie KlattAccounts Receivable Ernie KlattAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales Select Select Accounts Payable Marty RicheyAccounts Receivable Marty RicheyAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry Select Select Dec 31 adjusting Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales Select Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales Select Question Content Area c How much higher (lower) would Shipway Company's net income have been under the direct write off method than under the allowance method HigherLower by $fill in the blank 7f6a37f4dfbc035 2 Check My Work3 more Check My Work uses remaining

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Question: Entries for Bad Debt Expense under the Direct Write-Off and Allowance Methods The following selected transactions were taken from the records of Shipway Company for

Entries for Bad Debt Expense under the Direct Write-Off and Allowance Methods

The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31:

Apr. 13

Wrote off account of Dean Sheppard, $7,960.

May 15

Received $3,980 as partial payment on the $10,590 account of Dan Pyle. Wrote off the remaining balance as uncollectible.

July 27

Received $7,960 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash receipt.

Dec. 31

Wrote off the following accounts as uncollectible (record as one journal entry):

Paul Chapman	$5,330
Duane DeRosa	3,980
Teresa Galloway	2,390
Ernie Klatt	3,340
Marty Richey	1,190

Dec. 31

If necessary, record the year-end adjusting entry for the uncollectible accounts.

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

Question Content Area

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

Apr. 13	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -
	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry		- Select -
May 15	Accounts Payable-Dan PyleAccounts Receivable-Dan PyleAllowance for Doubtful AccountsCashNo entrySales	- Select -	- Select -
	Accounts Payable-Dan PyleAccounts Receivable-Dan PyleAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales	- Select -	- Select -
	Accounts Payable-Dan PyleAccounts Receivable-Dan PyleAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
July 27-reinstate	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales	- Select -
	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry		- Select -
July 27-collection	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -
	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry		- Select -
Dec. 31-write-off	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
	Accounts Payable-Paul ChapmanAccounts Receivable-Paul ChapmanAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
	Accounts Payable-Duane DeRosaAccounts Receivable-Duane DeRosaAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
	Accounts Payable-Teresa GallowayAccounts Receivable-Teresa GallowayAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales	- Select -	- Select -
	Accounts Payable-Ernie KlattAccounts Receivable-Ernie KlattAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
	Accounts Payable-Marty RicheyAccounts Receivable-Marty RicheyAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
Dec. 31-adjusting	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -
	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry		- Select -

Question Content Area

b. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 2% of credit sales are expected to be uncollectible. Shipway Company recorded $1,941,400 of credit sales during the year.

Journalize the transactions under the allowance method.

Apr. 13	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -
	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry		- Select -
May 15	Accounts Payable-Dan PyleAccounts Receivable-Dan PyleBad Debt ExpenseCashNo entrySales	- Select -	- Select -
	Accounts Payable-Dan PyleAccounts Receivable-Dan PyleAllowance for Doubtful AccountsBad Debt ExpenseInterest RevenueNo entry	- Select -	- Select -
	Accounts Payable-Dan PyleAccounts Receivable-Dan PyleAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
July 27-reinstate	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales	- Select -
	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry		- Select -
July 27-collection	Accounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseCashInterest RevenueNo entry	- Select -
	Accounts Payable-Dean SheppardAccounts Receivable-Dean SheppardAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry		- Select -
Dec. 31-write-off	Accounts Payable-Paul ChapmanAccounts Receivable-Paul ChapmanAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
	Accounts Payable-Paul ChapmanAccounts Receivable-Paul ChapmanAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
	Accounts Payable-Duane DeRosaAccounts Receivable-Duane DeRosaAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
	Accounts Payable-Teresa GallowayAccounts Receivable-Teresa GallowayAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
	Accounts Payable-Ernie KlattAccounts Receivable-Ernie KlattAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales	- Select -	- Select -
	Accounts Payable-Marty RicheyAccounts Receivable-Marty RicheyAllowance for Doubtful AccountsBad Debt ExpenseCashNo entry	- Select -	- Select -
Dec. 31-adjusting	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales	- Select -
	Accounts PayableAccounts ReceivableAllowance for Doubtful AccountsBad Debt ExpenseNo entrySales		- Select -

Question Content Area

c. How much higher (lower) would Shipway Company's net income have been under the direct write-off method than under the allowance method?

HigherLower

by $fill in the blank 7f6a37f4dfbc035_2

Check My Work3 more Check My Work uses remaining.

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