Entries for Bad Debt Expense Under the Direct Write-Off andAllowance Method The following selected transactions were takenfrom the records of Silhouette Company for the year ending December31, 2014: Mar. 4 Wrote off account of Myron Rimando, $3,210. May 19Received $2,280 as partial payment on the $5,750 account of ShirleyMason. Wrote off the remaining balance as uncollectible. Aug. 7Received the $3,210 from Myron Rimando, which had been written offon March 4. Reinstated the account and recorded the cash receipt.Dec. 31 Wrote off the following accounts as uncollectible (recordas one journal entry): Brandon Peele $930 Clyde Stringer 580 NedBerry 2,210 Mary Adams 1,280 Gina Bowers 350 Dec. 31 If necessary,record the year-end adjusting entry for the uncollectible accounts.The company prepared the following aging schedule for its accountsreceivable: Aging Class (Number of Days Past Due) ReceivablesBalance on December 31 Estimated Percent of Uncollectible Accounts0-30 days $154,000 1 % 31-60 days 58,000 8 61-90 days 18,000 2591-120 days 7,000 45 More than 120 days 9,000 85 Total receivables$246,000
aJournalize the transactions for 2014 under thedirect write-off method
b. Journalize the transactions for 2014 underthe allowance method, assuming that the allowance account had abeginning balance of $9,630 on January 1, 2014, and the companyuses the analysis of receivables method.
c. How much higher (lower) would Silhouette's2014 net income have been under the direct write-off method thanunder the allowance method?
SelectHigherLowerCorrect 1 of Item 3 by
. .
Entries for Bad Debt Expense Under the Direct Write-Off andAllowance Method The following selected transactions were takenfrom the records of Silhouette Company for the year ending December31, 2014: Mar. 4 Wrote off account of Myron Rimando, $3,210. May 19Received $2,280 as partial payment on the $5,750 account of ShirleyMason. Wrote off the remaining balance as uncollectible. Aug. 7Received the $3,210 from Myron Rimando, which had been written offon March 4. Reinstated the account and recorded the cash receipt.Dec. 31 Wrote off the following accounts as uncollectible (recordas one journal entry): Brandon Peele $930 Clyde Stringer 580 NedBerry 2,210 Mary Adams 1,280 Gina Bowers 350 Dec. 31 If necessary,record the year-end adjusting entry for the uncollectible accounts.The company prepared the following aging schedule for its accountsreceivable: Aging Class (Number of Days Past Due) ReceivablesBalance on December 31 Estimated Percent of Uncollectible Accounts0-30 days $154,000 1 % 31-60 days 58,000 8 61-90 days 18,000 2591-120 days 7,000 45 More than 120 days 9,000 85 Total receivables$246,000
aJournalize the transactions for 2014 under thedirect write-off method
b. Journalize the transactions for 2014 underthe allowance method, assuming that the allowance account had abeginning balance of $9,630 on January 1, 2014, and the companyuses the analysis of receivables method.
c. How much higher (lower) would Silhouette's2014 net income have been under the direct write-off method thanunder the allowance method?
SelectHigherLowerCorrect 1 of Item 3 by
. .
