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The following selected transactions were taken from the records of Aprilla Company for the first year of its operations ending December 31, 2012: Jan. 27 Wrote off account of C. Knoll, $5,640. Feb.

The following selected transactions were taken from the records of Aprilla Company for the first year of its operations ending December 31, 2012:

Jan. 27 Wrote off account of C. Knoll, $5,640.
Feb. 17 Received $2,820 as partial payment on the $7,500 account of Joni Lester.  Wrote off the remaining balance as uncollectible.
Mar. 3 Received $5,640 from C. Knoll, which had been written off on January 27.  Reinstated the account and recorded the cash receipt.
Dec. 31 Wrote off the following accounts as uncollectible (record as one journal entry):
   
Jason Short $3,780
Kim Snider 2,820
Sue Pascall 1,690
Tracy Lane 2,370
Randy Pape 850
   
If necessary, record the year-end adjusting entry for the uncollectible accounts.

For those amount boxes in which no entry is required, leave the box blank. If an account is not required, select "No entry" from the drop down box(es).

a.  Journalize the transactions for 2012 under the direct write-off method.

b.  Aprilla Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 2% of credit sales are expected to be uncollectible. Lights of the Aprilla Company recorded $1,975,000 of credit sales during 2012.

Journalize the transactions for 2012 under the allowance method.

c.  How much higher (lower) would Aprilla Company's net income have been under the direct write-off method than under the allowance method?



 MuhammadYousaf
quote
Wrote off account of C. Knoll, $5,640. Feb. 17 Received $2,820 as partial payment on the $7,500 account of Joni Lester. Wrote off the remaining balance as uncollectible. Mar. 3 Received $5,640 from C. Knoll, which had been written off on January 27. Reinstated the account and recorded th...(318 more words & 0 attachments).
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