80) On December 31, 2013, the unadjusted trial balance of Tarzwell Services showed the following balances:

Accounts receivable $200,000

Allowance for doubtful accounts1,000Cr.

Sales700,000

The business has given up trying to collect $5,000 of its accounts receivable but has not yet recorded the write-off entry. The firm uses the allowance method to estimate bad-debt expense.

a)Provide the entry for the write-off.

b)If the firm uses the percent-of-sales allowance method for recording bad-debt expense, and has experienced an average 6% rate of non-collection based on sales, provide the entry to record bad-debt expense for 2013.

c)Assume that after the firm recorded the $5,000 of write-offs, it determined that 18% of its remaining accounts receivable will be uncollectible under the aging method. Provide the entry to record bad-debt expense.

81) Munich Company's total sales for the year amounted to $100,000, of which 60 percent was on credit. The unadjusted trial balance showed accounts receivable of $20,000, and the allowance for doubtful accounts reflected a $800 credit balance (before the write-off of a bad account of $500). Munich uses 3% of accounts receivable as an estimate of bad-debt expense.  Calculate the bad-debt expense for the year for Munich Company.