Reference no: EM132669232

Brady is hired in 2021 to be the accountant for Anderson Manufacturing, a private company. At the end of 2021, the balance of Accounts Receivable is $23,500. In the past, Anderson has used only the direct write-off method to account for bad debts. Based on a detailed analysis of amounts owed, Brady believes the best estimate of future bad debts is $7,900.

Problem 1: If Anderson continues to use the direct write-off method to account for uncollectible accounts, what adjustment, if any, would Brady record at the end of 2021? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Problem 2: What adjustment, if any, would Brady record if Anderson instead uses the allowance method to account for uncollectible accounts? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)