Delores Cooper operates Cooper Garden Designs Most of

her customers #4420

Delores Cooper operates Cooper Garden Designs. Most of her customers pay cash so she
uses the direct write-off method to account for uncollectible accounts receivable. On May 3,
2014, she determined that the $2,600 account for Wilma Benz was uncollectible. During 2014,
she had total credit sales of $265,000. The December 31, 2014, balance in accounts receivable
was $42,000.RequiredRecord the May 3 write-off using the direct write-off method.Analysis
Component:Delores wants to compare the effect of using the allowance method versus the
direct write-off method for recording uncollectible accounts. If uncollectible accounts were
estimated at (a) 2% of credit sales or (b) 4% of outstanding accounts receivable, prepare a
comparison of the effects on net income of using the allowance methods versus the direct write-
off method.View Solution:
Delores Cooper operates Cooper Garden Designs Most of her customers

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