Morry Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31:
Customer Amount
J. Jackson $10,000
L. Stanton 9,500
C. Barton 13,100
S. Fenton 2,400
Total $35,000 Required
(a) Journalize the write-offs for the current year under the direct write-off method.
(b) Journalize the write-offs for the current year under the allowance method. Also, journalize the adjusting entry for uncollectible receivables assuming the company made $2,400,000 of credit sales during the year and the industry average for uncollectible receivables is 1.5% of credit sales.
(c) How much higher or lower would Morry Company’s net income have been under the direct write-off method than under the allowance method?
Indicate the answer choice that best completes the statement or answers the question.
40. Which of the following is a guideline for behaving ethically?
I. Identify the consequences of a decision and its effect on others.
II. Consider your obligations and responsibilities to those affected by the decision.
III. Identify your decision based on personal standards of honesty and fairness.
a. I and II
b. II and III
c. I and III
d. I, II, and III