Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 5, Problem 5.12BE
To determine
Direct write-off method:
This method does not make allowance or estimation for future expected uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting
To record: The write-off of a customer’s account on March 14.
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At the end of 2021, Worthy Co.’s balance for Accounts Receivable is $20,000, while the company’s total assets equal $1,500,000. In addition, the company expects to collect all of its receivables in 2022. In 2022, however, one customer owing $2,000 becomes a bad debt on March 14. Record the write off of this customer’s account in 2022 using the direct write-off method.
At the end of 2024, Garcia Company’s balance for Accounts Receivable is $11,000, while the company’s total assets equal $1,410,000. In addition, the company expects to collect all of its receivables in 2025. In 2025, however, one customer owing $2,600 becomes a bad debt on March 14.
Record the write off of this customer’s account in 2025 using the direct write-off method. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
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Chapter 5 Solutions
Financial Accounting
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