Question: Journalizing transactions using the direct write-off method On June 1, Best Performance Cell Phones sold $21,000 of merchandise to Anthony Trucking Company on account. Anthony fell on hard times and on July 15 paid only $8,000 of the account receivable. After repeated attempts to collect, Best Performance finally wrote off its accounts receivable from Anthony on September 5. Six months later, March 5, Best Performance received Anthony's check for $13,000 with a note apologizing for the late payment.
Requirements: 1. Journalize the transactions for Best Performance Cell Phones using the direct write-off method Ignore Cost of Goods Sold.
2. What are some limitations that Best Performance will encounter when using the direct write-off method?
At January 1, 2016, Blue Mountain Flagpoles had Accounts Receivable of $33,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Blue Mountain Flagpoles recorded the following: a. Sales of $170,000 ($155,000 on account; $15,000 for cash). Ignore Cost of Goods Sold.
b. Collections on account, $136,000.
c. Write-offs of uncollectible receivables, $2,100.