spangler company wrote off the following accounts receivable as uncollectible for th 554140

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:

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?