Spangler Company wrote off the following

Spangler Company wrote off the following

receivable as uncollectible for the first year of its operations ending December 31, 2012:
Customer Amount
Will Boyette …………. $10,000
Stan Frey ………………. 8,000
Tammy Imes ……………. 5,000
Shana Wagner …………. 6,000
Total ………………… $29,000

Spangler Company wrote off the following

a. Journalize the write-offs for 2012 under the direct write-off method.
b. Journalize the write-offs for 2012 under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded $3,000,000 of credit sales during 2012. Based on past history and industry averages, 1?1% of credit sales are expected to be uncollectible.
c. How much higher (lower) would Spangler Company’s 2012 net income have been under the direct write-off method than under the allowance method?

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