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work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion Return to a Required information Exercise 5-13A Compare the allowance method and the direct write-off method (LO5-6) [The following information applies to the questions displayed below) At the beginning of 2021, Brad's Heating & Air (BHA) has a balance of $24.400 in accounts receivable Because BHA is a privately owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the end of 2021, BHA wishes to obtain a loan at the local bank, which requires the preparation of proper financial statements. This means that BHA now will need to use the allowance method. The following transactions occur during 2021 and 2022 1. During 2021, install air conditioning systems on account, $174,000. 2. During 2021, collect $169,000 from customers on account 3. At the end of 2021, estimate that uncollectible accounts total 15% of ending accounts receivable. 4. In 2022, customers' accounts totaling $6,400 are written off as uncollectible. Exercise 5-13A Part 3 2025a CITY Systems HOLLUUN, 1/4, 2. During 2021, collect $169,000 from customers on account 3. At the end of 2021, estimate that uncollectible accounts total 15% of ending accounts receivable 4. In 2022, customers' accounts totaling $6,400 are written off as uncollectible. Exercise 5-13A Part 3 3. Calculate bad debt expense for 2021 and 2022 under the allowance method and under the direct write-off method, prior to any adjusting entries in 2022 (Leave no cells blank.) Bad Debt Expense 2021: 2022 Answer is not complete. Allowance Direct Write-off Method Method $ 4,5153 S 7.100%

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