(Solution) - Magnetics International wrote off the following accounts receiva -(2025 Original AI-Free Solution)

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Magnetics International wrote off the following accounts receivable as uncollectible for the year ending December 31, 2012:
Customer Amount
Trey Betts .... $15,500
Cheryl Carson .... 9,000
Irene Harris .... 29,700
Renee Putman .... 3,100
Total ...... $57,300

The company prepared the following aging schedule for its accounts receivable on December 31, 2012:

a. Journalize the write-offs for 2012 under the direct write-off method.
b. Journalize the write-offs and the year-end adjusting entry for 2012 under the allowance method, assuming that the allowance account had a beginning balance of $55,000 on January 1, 2012, and the company uses the analysis of receivables method.
c. How much higher (lower) would Magnetics International?s 2012 net income have been under the allowance method than under the direct write-offmethod?