Entries for bad debt expense under the direct write-off and allowance methodsSeaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31:CustomerKim AbelLee DrakeJenny GreenMike LambTotalAging Class (Numberof Days Past Due)0-30 days31-60 days61-90 days91-120 daysMore than 120 daysTotal receivablesThe company prepared the following aging schedule for its accounts receivable on December 31:Aging Class (Numberof Days Past Due)0-30 days31-60 days61-90 days91-120 daysMore than 120 daysTotal receivablesBad Debt ExpenseAccounts Receivable-Kim AbelAccounts Receivable-Lee DrakeAccounts Receivable-Jenny GreenAccounts Receivable-Mike LambAllowance for Doubtful AccountsAccounts Receivable-Kim AbelAccounts Receivable-Lee DrakeAccounts Receivable-Jenny GreenAccounts Receivable-Mike LambBad Debt ExpenseAmount$24,20034,15029,70017,600$105,650Allowance for Doubtful AccountsFeedbackReceivables Balanceon December 31$735,000300,000110,00075,00095,000$1,315,000Receivables Balanceon December 31$735,000300,000110,00075,00095,000$1,315,000FeedbackEstimated Percent ofUncollectible Accountsa. 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%105,650 ✔215300 X60b. Journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of $91,150and the company uses the analysis of receivables method. If an amount box does not require an entry, leave it blank.Estimated Percent ofUncollectible Accounts24,200 ✔34,15029,70017,60024,20034,15029,70017,6001%21530600 XCheck My WorkUnder 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?LowerX

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