Accounting help!!! again!!?

Question

1. The LMN Co. uses the direct write-off method of accounting for uncollectible accounts receivable. The entry to write off an account that has been determined to be uncollectible would be as follows

a. debit Allowance for Doubtful Accounts; credit Accounts Receivable

b. debit Sales Returns and Allowance, credit Accounts Receivable

c. debit Uncollectible Accounts Expense; credit Allowance for Doubtful Accounts

d. debit Accounts Receivable, credit Uncollectible Accounts Expense

e. debit Uncollectible Accounts Expense; credit Accounts Receivable

2. Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and uncollectible accounts expense is estimated at 3% of net sales. If net sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is

a. $18,500

b. $17,500

c. $18,000

d. none of the above

Thanks again guys!

Answer 1

1. E

2. b

Answer 2

1 e

2 b

Answer 3

1. e

The direct write-off method does NOT have an Allowance for Doubtful Accounts.  A/R would be decreased (credited) and an expense would be recognized (credited)

2. b

(600,000* .03=18,000, less 500 Allowance balance, = 17,500)