The following selected transactions were taken from the recordsof Shipway Company for the first year of its operations endingDecember 31, 2016:
Apr. 13. Wrote off account of Dean Sheppard,$8,460. May 15. Received $550 as partial payment onthe $7,040 account of Dan Pyle. Wrote off the remaining balance asuncollectible. July 27. Received $8,460 from Dean Sheppard,whose account had been written off on April 13. Reinstated theaccount and recorded the cash receipt. Dec. 31. Wrote off the following accounts asuncollectible (record as one journal entry): Paul Chapman $2,055 Duane DeRosa 3,580 Teresa Galloway 4,760 Ernie Klatt 1,480 Marty Richey 1,690 31. If necessary, record the year-endadjusting entry for uncollectible accounts.
Required:
A. Journalize the transactions for2016 under the direct write-off method. If no entry is required,simply skip to the next transaction. Refer to the Chart of Accountsfor exact wording of account titles. B. Journalize the transactions for2016 under the allowance method. Shipway Company uses the percentof credit sales method of estimating uncollectible accountsexpense. Based on past history and industry averages, 0.90% ofcredit sales are expected to be uncollectible. Shipway Companyrecorded $3,788,000 of credit sales during 2016. If no entry isrequired, simply skip to the next transaction. Refer to the Chartof Accounts for exact wording of account titles. C. How much higher (lower) wouldShipway Companyâs net income have been under the direct write-offmethod than under the allowance method?
X
Journal
A. Journalize the transactions for 2016 under the directwrite-off method. If no entry is required, simply skip to the nexttransaction. Refer to the Chart of Accounts for exact wording ofaccount titles.
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The following selected transactions were taken from the recordsof Shipway Company for the first year of its operations endingDecember 31, 2016:
Apr. 13. Wrote off account of Dean Sheppard,$8,460. May 15. Received $550 as partial payment onthe $7,040 account of Dan Pyle. Wrote off the remaining balance asuncollectible. July 27. Received $8,460 from Dean Sheppard,whose account had been written off on April 13. Reinstated theaccount and recorded the cash receipt. Dec. 31. Wrote off the following accounts asuncollectible (record as one journal entry): Paul Chapman $2,055 Duane DeRosa 3,580 Teresa Galloway 4,760 Ernie Klatt 1,480 Marty Richey 1,690 31. If necessary, record the year-endadjusting entry for uncollectible accounts.
Required:
A. Journalize the transactions for2016 under the direct write-off method. If no entry is required,simply skip to the next transaction. Refer to the Chart of Accountsfor exact wording of account titles. B. Journalize the transactions for2016 under the allowance method. Shipway Company uses the percentof credit sales method of estimating uncollectible accountsexpense. Based on past history and industry averages, 0.90% ofcredit sales are expected to be uncollectible. Shipway Companyrecorded $3,788,000 of credit sales during 2016. If no entry isrequired, simply skip to the next transaction. Refer to the Chartof Accounts for exact wording of account titles. C. How much higher (lower) wouldShipway Companyâs net income have been under the direct write-offmethod than under the allowance method?
X
Journal
A. Journalize the transactions for 2016 under the directwrite-off method. If no entry is required, simply skip to the nexttransaction. Refer to the Chart of Accounts for exact wording ofaccount titles.
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B. Journalize the transactions for 2016 under the allowancemethod. Shipway Company uses the percent of credit sales method ofestimating uncollectible accounts expense. Based on past historyand industry averages, 0.90% of credit sales are expected to beuncollectible. Shipway Company recorded $3,788,000 of credit salesduring 2016. If no entry is required, simply skip to the nexttransaction. Refer to the Chart of Accounts for exact wording ofaccount titles.
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C. How much higher (lower) would Shipway Companyâs net incomehave been under the direct write-off method than under theallowance method?
Higher or Lower or No Change by $____
The following selected transactions were taken from the recordsof Shipway Company for the first year of its operations endingDecember 31, 2016:
Apr. | 13. | Wrote off account of Dean Sheppard,$8,460. | |
May | 15. | Received $550 as partial payment onthe $7,040 account of Dan Pyle. Wrote off the remaining balance asuncollectible. | |
July | 27. | Received $8,460 from Dean Sheppard,whose account had been written off on April 13. Reinstated theaccount and recorded the cash receipt. | |
Dec. | 31. | Wrote off the following accounts asuncollectible (record as one journal entry): | |
Paul Chapman | $2,055 | ||
Duane DeRosa | 3,580 | ||
Teresa Galloway | 4,760 | ||
Ernie Klatt | 1,480 | ||
Marty Richey | 1,690 | ||
31. | If necessary, record the year-endadjusting entry for uncollectible accounts. |
Required:
A. | Journalize the transactions for2016 under the direct write-off method. If no entry is required,simply skip to the next transaction. Refer to the Chart of Accountsfor exact wording of account titles. |
B. | Journalize the transactions for2016 under the allowance method. Shipway Company uses the percentof credit sales method of estimating uncollectible accountsexpense. Based on past history and industry averages, 0.90% ofcredit sales are expected to be uncollectible. Shipway Companyrecorded $3,788,000 of credit sales during 2016. If no entry isrequired, simply skip to the next transaction. Refer to the Chartof Accounts for exact wording of account titles. |
C. | How much higher (lower) wouldShipway Companyâs net income have been under the direct write-offmethod than under the allowance method? |
X
Journal
A. Journalize the transactions for 2016 under the directwrite-off method. If no entry is required, simply skip to the nexttransaction. Refer to the Chart of Accounts for exact wording ofaccount titles.
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The following selected transactions were taken from the recordsof Shipway Company for the first year of its operations endingDecember 31, 2016:
Apr. | 13. | Wrote off account of Dean Sheppard,$8,460. | |
May | 15. | Received $550 as partial payment onthe $7,040 account of Dan Pyle. Wrote off the remaining balance asuncollectible. | |
July | 27. | Received $8,460 from Dean Sheppard,whose account had been written off on April 13. Reinstated theaccount and recorded the cash receipt. | |
Dec. | 31. | Wrote off the following accounts asuncollectible (record as one journal entry): | |
Paul Chapman | $2,055 | ||
Duane DeRosa | 3,580 | ||
Teresa Galloway | 4,760 | ||
Ernie Klatt | 1,480 | ||
Marty Richey | 1,690 | ||
31. | If necessary, record the year-endadjusting entry for uncollectible accounts. |
Required:
A. | Journalize the transactions for2016 under the direct write-off method. If no entry is required,simply skip to the next transaction. Refer to the Chart of Accountsfor exact wording of account titles. |
B. | Journalize the transactions for2016 under the allowance method. Shipway Company uses the percentof credit sales method of estimating uncollectible accountsexpense. Based on past history and industry averages, 0.90% ofcredit sales are expected to be uncollectible. Shipway Companyrecorded $3,788,000 of credit sales during 2016. If no entry isrequired, simply skip to the next transaction. Refer to the Chartof Accounts for exact wording of account titles. |
C. | How much higher (lower) wouldShipway Companyâs net income have been under the direct write-offmethod than under the allowance method? |
X
Journal
A. Journalize the transactions for 2016 under the directwrite-off method. If no entry is required, simply skip to the nexttransaction. Refer to the Chart of Accounts for exact wording ofaccount titles.
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B. Journalize the transactions for 2016 under the allowancemethod. Shipway Company uses the percent of credit sales method ofestimating uncollectible accounts expense. Based on past historyand industry averages, 0.90% of credit sales are expected to beuncollectible. Shipway Company recorded $3,788,000 of credit salesduring 2016. If no entry is required, simply skip to the nexttransaction. Refer to the Chart of Accounts for exact wording ofaccount titles.
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C. How much higher (lower) would Shipway Companyâs net incomehave been under the direct write-off method than under theallowance method?
Higher or Lower or No Change by $____