Question

Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31, 2016:

Required:

Chart of Accounts

Journal

A. On December 31, journalize the write-offs for 2016 under the direct write-off method. Refer to the Chart of Accounts for exact wording of account titles.

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B. On December 31, journalize the write-offs for 2016 under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded $5,248,000 of credit sales during 2016. Based on past history and industry averages, 0.70% of credit sales are expected to be uncollectible. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

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Final Question

C. How much higher (lower) would Casebolt Company’s 2016 net income have been under the direct write-off method than under the allowance method?

by .

Customer

Amount

Shawn Brooke

$4,630

Eve Denton

5,185

Art Malloy

11,089

Cassie Yost

9,167

Total

$30,071