Project #14876 - Accounting Finance

Allowance Method versus Direct Write-Off method.  On March 10, Barrett Inc., declared a $2,700 account receivable from Lamas Company as uncollectible and wrote off the account.  On novermber 18, Barrett received a $1,200 payment on the account from Lamas.

 

a.  Assume that Barrett uses the allowance method of handling credit losses.  Prepare the journal entries to record the write-off and the subsequent recovery of Lamas' account.

b. Assume that Barrett uses the direct write-off method of handling credit losses.  Perepare the journal entries to record the write-off and the subsequent recory of Lamas's account.

c.  Assume that the patment from lamas arrives on the following February 5, rather than on November 18 of the current year.  (1) Prepare the journal entries to record the write-off and subsequent recovery of Lamas's account under the allowance method.  (2) Prepare the journal entries to record the write-off and subsequent recovery of Lamas's account under the direct write-off method.

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Due By (Pacific Time) 10/19/2013 12:00 am
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