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19 May 2019

Apr. 2. Sold merchandise on account toPeking Palace Co., $37,940. The cost of the merchandise sold was$25,700.
June 9. Received $9,050 from Peking PalaceCo. and wrote off the remainder owed on the sale of April 2 asuncollectible.
Oct. 31. Reinstated the account of PekingPalace Co. that had been written off on June 9 and received $28,890cash in full payment.

Journalize the above transactions in the accounts of DiningInteriors Company, a restaurant supply company that uses theallowance method of accounting for uncollectible receivables. Referto the Chart of Accounts for exact wording of account titles.

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Hubert Koch
Hubert KochLv2
20 May 2019

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Journalize the following transactions using the direct write-offmethod of accounting for uncollectible receivables.

April 1 Sold merchandise on account to Jim Dobbs, $7,700. Thecost of the merchandise is $5,200.

June 10 Received $1,000 from Jim Dobbs and wrote off theremainder owed of $6,700.

Oct. 11 Reinstated the account of Jim Dobbs and received $6,700cash in full payment.

If an amount box does not require an entry, leave it blank.

The following transactions were completed by The Irvine Company during the current fiscal year ended December 31: Feb. 8 Received 45% of the $18,700 balance owed by DeCoy Co., a bankrupt business, and wrote off the remainder as uncollectible. May 27 Reinstated the account of Seth Nelsen, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,270 cash in full payment of Seth’s account. Aug. 13 Wrote off the $6,360 balance owed by Kat Tracks Co., which has no assets. Oct. 31 Reinstated the account of Crawford Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,975 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (compound entry): Newbauer Co., $7,265; Bonneville Co., $5,595; Crow Distributors, $9,305; Fiber Optics, $1,150. Dec. 31 Based on an analysis of the $1,759,500 of accounts receivable, it was estimated that $35,190 will be uncollectible. Journalized the adjusting entry.

The following selected transactions were taken from the recordsof Shipway Company for the first year of its operations endingDecember 31, 2016:
Apr. 13. Wrote off account of DeanSheppard, $8,360.
May 15. Received $470 as partial payment onthe $7,120 account of Dan Pyle. Wrote off the remaining balance asuncollectible.
July 27. Received $8,360 from DeanSheppard, whose account had been written off on April 13.Reinstated the account and recorded the cashreceipt.
Dec. 31. Wrote off the following accountsas uncollectible (record as one journal entry):
Paul Chapman $2,375
Duane DeRosa 3,560
Teresa Galloway 4,665
Ernie Klatt 1,260
Marty Richey 1,795
31. If necessary, record the year-end adjusting entryfor uncollectible accounts.
Required:
A. Journalize the transactions for 2016 under thedirect write-off method. If no entry is required, simply skip tothe next transaction. Refer to the Chart of Accounts for exactwording of account titles.
B. Journalize the transactions for 2016 under theallowance method. Shipway Company uses the percent of credit salesmethod of estimating uncollectible accounts expense. Based on pasthistory and industry averages, 0.85% of credit sales are expectedto be uncollectible. Shipway Company recorded $3,836,000 of creditsales during 2016. If no entry is required, simply skip to the nexttransaction. Refer to the Chart of Accounts for exact wording ofaccount titles.
C. How much higher (lower) would Shipway Company’s netincome have been under the direct write-off method than under theallowance method?

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