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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SUBJECT - GENERAL ACCOUNT Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $14,114. Of the $14,114, $8,395 was for material and $5,719 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $25,963. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $33,809 and factory overhead was $19,934. If the average cost method is used what would be the conversion cost per unit? a. $1.91 b. $5.31 c. $3.45 d. $1.73

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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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