**Entries for Bad Debt Expense: Direct Write-off and Allowance Methods**Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31:- **Customer**: - Kim Abel: $24,200 - Lee Drake: $34,150 - Jenny Green: $29,700 - Mike Lamb: $17,600- **Total**: $105,650**Aging Schedule for Accounts Receivable: December 31**| Aging Class (Number of Days Past Due) | Receivables Balance on December 31 | Estimated Percent of Uncollectible Accounts ||---------------------------------------|-------------------------------------|--------------------------------------------|| 0-30 days | $735,000 | 1% || 31-60 days | 300,000 | 2% || 61-90 days | 110,000 | 15% || 91-120 days | 75,000 | 30% || More than 120 days | 95,000 | 60% |**Total Receivables**: $1,315,000**Journal Entries**a. **Direct Write-off Method**- Bad Debt Expense: $105,650- Accounts Receivable (Kim Abel): $24,200- Accounts Receivable (Lee Drake): $34,150- Accounts Receivable (Jenny Green): $29,700- Accounts Receivable (Mike Lamb): $17,600b. **Allowance Method**- Allowance for Doubtful Accounts: $105,650- Accounts Receivable (Kim Abel): $24,200- Accounts Receivable (Lee Drake): $34,150- Accounts Receivable (Jenny Green): $29,700- Accounts Receivable (Mike Lamb): $17,600- Bad Debt Expense: $0**Feedback**- Under the allowance method, once a customer account is identified as uncollectible, it is written off against the allowance account.c. **Net Income Impact**- How much higher (lower) would Seaforth International's net income have been under the allowance method than under the direct write-off method?- **Lower**: $0This analysis helps in understanding the impact of different accounting methods on financial statements, particularly in managing bad

Bad debt expense arises when the receivables from the customers become bad or irrecoverable. It is…

Entries for bad debt expense under the direct write-off and allowance methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Kim Abel Lee Drake Jenny Green Mike Lamb Total Aging Class (Number of Days Past Due) 0-30 days 31-60 days 61-90 days 91-120 days More than 120 days Total receivables The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) 0-30 days 31-60 days 61-90 days 91-120 days More than 120 days Total receivables Bad Debt Expense Accounts Receivable-Kim Abel Amount $24,200 34,150 29,700 17,600 $105,650 $735,000 300,000 110,000 75,000 95,000 $1,315,000 Accounts Receivable-Lee Drake Accounts Receivable-Jenny Green Accounts Receivable-Mike Lamb Receivables Balance on December 31 Receivables Balance on December 31 Allowance for Doubtful Accounts Accounts Receivable-Kim Abel Accounts Receivable-Lee Drake Accounts Receivable-Jenny Green Accounts Receivable-Mike Lamb Feedback Bad Debt Expense Allowance for Doubtful Accounts $735,000 300,000 110,000 75,000 95,000 $1,315,000 Estimated Percent of Uncollectible Accounts a. Journalize the write-offs under the direct write-off method. If an amount box does not require an entry, leave it blank. 105,650 ✔ 1% 2 15 30 105,650 60 0 X Estimated Percent of Uncollectible Accounts 24,200 ✓ b. Journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of $91,1 and the company uses the analysis of receivables method. If an amount box does not require an entry, leave it blank. 34,150 29,700 ✔ 17,600 ✓ 24,200 34,150 ✓ 29,700 ✓ 1% 17,600 ✓ 2 15 30 60 0 X Check My Work Under the allowance method once a customer account is identified as uncollectible, it is written off against the allowance account. C. How much higher (lower) would Seaforth International's net income have been under the allowance method than under the direct write-off method? Lower X