Direct write-off method: This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible. Allowance method: It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account. To record: The journal entry in the books of Company C, to write-off the account of Company WT, under direct-write off method.

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Answer 1

Question

Chapter 8, Problem 8.5EX

A.

To determine

Direct write-off method:

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account.

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under direct-write off method.

B.

To determine

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.

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I need assistance with this financial accounting problem using appropriate calculation techniques.

Dodge Industries has the following data: direct labor $185,000, direct materials used $210,000, total manufacturing overhead $195,000, and beginning work in process $45,000. Compute total manufacturing costs and total cost of work in process.

I am looking for the most effective method for solving this financial accounting problem.

Answer 2

Question

Chapter 8, Problem 8.5EX

A.

To determine

Direct write-off method:

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account.

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under direct-write off method.

B.

To determine

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.

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Answer 3

Question

Chapter 8, Problem 8.5EX

A.

To determine

Direct write-off method:

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account.

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under direct-write off method.

B.

To determine

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.

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Answer 4

Question

Chapter 8, Problem 8.5EX

A.

To determine

Direct write-off method:

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account.

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under direct-write off method.

B.

To determine

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.

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Answer 5

Chapter 8, Problem 8.5EX

A.

To determine

Direct write-off method:

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account.

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under direct-write off method.

B.

To determine

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.

Answer 6

Chapter 8, Problem 8.5EX

A.

To determine

Direct write-off method:

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account.

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under direct-write off method.

Answer 7

Chapter 8, Problem 8.5EX

A.

To determine

Direct write-off method:

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

Allowance method:

It is a method for accounting bad debt expense, where amount of uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for doubtful account.

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under direct-write off method.

Answer 8

B.

To determine

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.

Answer 9

B.

To determine

To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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Solution Summary: The author explains the direct write-off method, which does not make an allowance or estimation for uncollectible accounts.

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To record: The journal entry in the books of Company C, to write-off the account of Company WT, under allowance method.

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