Allowance Method versus Direct Write-Off Method On March 10, May, Inc., declared a $2,500 account receivable from Anders Company as uncollectible and wrote off the account. On November 18, May received a $800 payment on the account from Anders. Assume that May uses the allowance method of handling credit losses. Prepare the journal entries to record the write-off and the subsequent recovery of Anders’s account. Assume that May uses the direct write-off method of handling credit losses. Prepare the journal entries to record the write-off and the subsequent recovery of Anders’s account. Assume that the payment from Anders arrives on the following February 5, rather than on November 18 of the current year. (1) Prepare the journal entries to record the write-off and subsequent recovery of Anders’s account under the allowance method. (2) Prepare the journal entries to record the write-off and subsequent recovery of Anders’s account under the direct write-off method. a. General Journal Date Description Debit Credit Mar.10 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To write off the Anders Company account. Nov.18 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To reinstate the Anders Company account. Nov.18 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To record remittance. b. General Journal Date Description Debit Credit Mar.10 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To write off the Anders Company account. Nov.18 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To reinstate the Anders Company account. Nov.18 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To record remittance. c.Part 1 General Journal Date Description Debit Credit Mar.10 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To write off the Anders Company account. Feb.5 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To reinstate the Anders Company account. Feb.5 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To record remittance. c.Part 2 General Journal Date Description Debit Credit Mar.10 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To write off the Anders Company account. Feb.5 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To reinstate the Anders Company account. Feb.5 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To record remittance.

Allowance Method versus Direct Write-Off Method On March 10, May, Inc., declared a $2,500 account receivable from Anders Company as uncollectible and wrote off the account. On November 18, May received a $800 payment on the account from Anders. Assume that May uses the allowance method of handling credit losses. Prepare the journal entries to record the write-off and the subsequent recovery of Anders’s account. Assume that May uses the direct write-off method of handling credit losses. Prepare the journal entries to record the write-off and the subsequent recovery of Anders’s account. Assume that the payment from Anders arrives on the following February 5, rather than on November 18 of the current year. (1) Prepare the journal entries to record the write-off and subsequent recovery of Anders’s account under the allowance method. (2) Prepare the journal entries to record the write-off and subsequent recovery of Anders’s account under the direct write-off method. a. General Journal Date Description Debit Credit Mar.10 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To write off the Anders Company account. Nov.18 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To reinstate the Anders Company account. Nov.18 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To record remittance. b. General Journal Date Description Debit Credit Mar.10 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To write off the Anders Company account. Nov.18 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To reinstate the Anders Company account. Nov.18 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To record remittance. c.Part 1 General Journal Date Description Debit Credit Mar.10 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To write off the Anders Company account. Feb.5 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To reinstate the Anders Company account. Feb.5 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To record remittance. c.Part 2 General Journal Date Description Debit Credit Mar.10 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To write off the Anders Company account. Feb.5 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To reinstate the Anders Company account. Feb.5 AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense Answer Answer To record remittance.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Allowance Method versus Direct Write-Off Method

On March 10, May, Inc., declared a $2,500 account receivable from Anders Company as uncollectible and wrote off the account. On November 18, May received a $800 payment on the account from Anders.

Assume that May uses the allowance method of handling credit losses. Prepare the journal entries to record the write-off and the subsequent recovery of Anders’s account.
Assume that May uses the direct write-off method of handling credit losses. Prepare the journal entries to record the write-off and the subsequent recovery of Anders’s account.
Assume that the payment from Anders arrives on the following February 5, rather than on November 18 of the current year. (1) Prepare the journal entries to record the write-off and subsequent recovery of Anders’s account under the allowance method. (2) Prepare the journal entries to record the write-off and subsequent recovery of Anders’s account under the direct write-off method.

General Journal
Date	Description	Debit	Credit
Mar.10	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To write off the Anders Company account.
Nov.18	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To reinstate the Anders Company account.
Nov.18	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To record remittance.

General Journal
Date	Description	Debit	Credit
Mar.10	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To write off the Anders Company account.
Nov.18	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To reinstate the Anders Company account.
Nov.18	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To record remittance.

c.Part 1

General Journal
Date	Description	Debit	Credit
Mar.10	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To write off the Anders Company account.
Feb.5	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To reinstate the Anders Company account.
Feb.5	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To record remittance.

c.Part 2

General Journal
Date	Description	Debit	Credit
Mar.10	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To write off the Anders Company account.
Feb.5	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To reinstate the Anders Company account.
Feb.5	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	AnswerAllowance for Doubtful AccountsAccounts Receivable - Anders CompanyCashBad Debts Expense	Answer	Answer
	To record remittance.

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