EX 9-17 Entries for bad debt expense under the direct write-off and allowance methods
Spangler Company wrote off the following accounts 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 |
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, 1½% 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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