Accounting for receivablesacme company had a january 1

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Reference no: EM13356739

Accounting for receivables

Acme Company had a January 1, balance in its Allowance for Doubtful Accounts of $7,000 for the current year. The following transactions and events affected the Allowance for Doubtful Accounts during the current year:

Apr 15 Brad's account receivable of $5,700 was deemed uncollectible.

July 1 Drake paid the full amount of a previously written-off account receivable. This receivable of $2,300 had been written off in the prior year.

Dec 31 Bad debts expense of $7,500 was recorded.

a. What amount should appear in the allowance for doubtful accounts in the December 31, balance sheet for the current year?

b. How are the direct write-off method and the allowance method applied in accounting for uncollectible accounts receivables? Please explain in words.

Reference no: EM13356739

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