At December 31, 2019, the trial balance of Skysong Company contained the following amounts before adjustment Debit Credit Accounts Receivable Allowance for Doubtful Accounts Sales Revenue $394,000 1,200 901,000 Based on the information given, which method of accounting for bad debts is Skysong Company using-the direct write-off method or the allowance method? (b) Prepare the adjusting entry at December 31, 2019, for bad debt expense, assuming an aging schedule indicates that $10,900 of accounts receivable will be uncollectible. (c) Repeat part (b) assuming that instead of a credit balance there is an $1,200 debit balance in Allowance for Doubtful Accounts. (d) During the next month, January 2020, a $2,800 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off. (e Repeat part (d) assuming that Skysong uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable.

(a) Based on the information given, which method of accounting for bad debts is Skysong Company using-the direct write-off method or the allowance method?

(b) Prepare the adjusting entry at December 31, 2019, for bad debt expense, assuming an aging schedule indicates that $10,900 of accounts receivable will be uncollectible.

bad debt expense = $10,900 - $1,200 = $9,700

(c) Repeat part (b) assuming that instead of a credit balance there is an $1,200 debit balance in Allowance for Doubtful Accounts.

bad debt expense = $10,900 + $1,200 = $12,100

(d) During the next month, January 2020, a $2,800 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off.

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

When you use the direct write off method, bad debt is debited against accounts receivable directly.

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