What are the advantages of using the allowance method

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Reference no: EM131828996

Question: At December 31, 2017, the trial balance of Malone Company contained the following amounts before adjustment.

Instructions: (a) Prepare the adjusting entry at December 31, 2017, to record bad debt expense, assuming that the aging schedule indicates that $10,200 of accounts receivable will be uncollectible.

(b) Repeat part (a), assuming that instead of a credit balance there is a $1,500 debit balance in Allowance for Doubtful Accounts.

(c) During the next month, January 2018, a $2,100 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.

(d) Repeat part (c), assuming that Malone Company uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.

(e) What are the advantages of using the allowance method in accounting for uncollectible accounts as compared to the direct write-off method?

Reference no: EM131828996

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