Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Method The following selected transactions...

 

Transcribed Image Text:

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, $8,070. Aug. 14. Received $5,730 as partial payment on the $14,450 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible. Oct. 16. Received the $8,070 from Kathy Quantel, whose account 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 5,570 Shannon Poole 3,230 Niki Spence Dec. 31. If necessary, record the year-end adjusting entry for uncollectible accounts. 890 If no entry is required, select "No entry" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. June 8 a. Journalize the transactions under the direct write-off method. Aug. 14 Aug. 14 Oct. 16 Oct. 16 Dec. 31 Dec. 31 b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $24,210 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: June 8 Aug. 14 Oct. 16 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 $387,000 145,000 46,000 17,000 23,000 $618,000 Estimated Percent of Uncollectible Accounts 3 % 7 25 45 90 Aug. 14 Oct. 16 Oct. 16 Dec. 31 Dec. 31 c. How much higher (lower) would Rustic Tables' net income have been under the direct write-off method than under the allowance method? by 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, $8,070. Aug. 14. Received $5,730 as partial payment on the $14,450 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible. Oct. 16. Received the $8,070 from Kathy Quantel, whose account 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 5,570 Shannon Poole 3,230 Niki Spence Dec. 31. If necessary, record the year-end adjusting entry for uncollectible accounts. 890 If no entry is required, select "No entry" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. June 8 a. Journalize the transactions under the direct write-off method. Aug. 14 Aug. 14 Oct. 16 Oct. 16 Dec. 31 Dec. 31 b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $24,210 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: June 8 Aug. 14 Oct. 16 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 $387,000 145,000 46,000 17,000 23,000 $618,000 Estimated Percent of Uncollectible Accounts 3 % 7 25 45 90 Aug. 14 Oct. 16 Oct. 16 Dec. 31 Dec. 31 c. How much higher (lower) would Rustic Tables' net income have been under the direct write-off method than under the allowance method? by

Answer rating: 100% (QA)

June 8 August 14 Oct 16 Oct 16 Dec 31 31 Junes August 14 Bad Dest Expense AC Dr To Accounts Receivab... View the full answer