Answer:
- 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.
Under the Allowance Method    
Dr Bad Debt Expense	$ 5.960  
Cr Allowance for Uncollectible Accounts  $ 5.960
Under the Direct Write-Off Method    
There aren't movements of writen-off accounts.
In 2022, customers’ accounts totaling $6,800 are written off as uncollectible. 
Under the Direct Write-Off Method    
Dr Bad Debt Expense	$ 6.800    
Cr Accounts Receivable  	$ 6.800  
Under the Allowance Method    
3. Calculate bad debt expense for 2022 under the allowance method  
Dr Bad Debt Expense	$ 5.440  
Cr Allowance for Uncollectible Accounts  $ 5.440
Explanation:
Dr Accounts Receivable  	$ 24.800
- During 2021, install air conditioning systems on account  
Dr Accounts Receivable  $ 178.000  
Cr Sales  $ 178.000
- During 2021, collect $173,000 from customers on account.    
Dr Cash	$ 173.000  
Cr Accounts Receivable  	$ 173.000
- 3. At the end of 2021, estimate that uncollectible accounts total 20% of ending accounts receivable.    
Dr Bad Debt Expense	$ 5.960  
Cr Allowance for Uncollectible Accounts  $ 5.960
Dr Accounts Receivable  $ 29.800  
Cr Allowance for Uncollectible Accounts  $ 5.960
- 4. In 2022, customers’ accounts totaling $6,800 are written off as uncollectible. Under the Allowance Method  
Dr Allowance for Uncollectible Accounts	$ 6.800  
Cr Accounts Receivable  	$ 6.800
- 4. In 2022, customers’ accounts totaling $6,800 are written off as uncollectible. Under the Direct Write-Off Method  
Dr Bad Debt Expense	$ 6.800  
Cr Accounts Receivable  	$ 6.800
Dr Accounts Receivable  $ 23.000  
Dr Allowance for Uncollectible Accounts  $ 840
- 3. Calculate bad debt expense for 2022 under the allowance method  
Dr Bad Debt Expense	$ 5.440  
Cr Allowance for Uncollectible Accounts  $ 5.440
Dr Accounts Receivable  $ 23.000  
Cr Allowance for Uncollectible Accounts  $ 4.600
If the company applies the allowance method, it means that the account Allowance for Uncollectible Accounts must show as balance the % of accounts receivables as CREDIT.
Because the company has a debit balance in that account it's necessary to register an entry that compensate the DEBIT value and reflect A CREDIT estimated as % of account receivable.
Bad accounts are those credits granted by the company and there is no possibility of being charged.
When customers buy products on credits but the company cannot collect the debt, then it's necessary to cancel the unpaid invoice as uncollectible.
One way is to directly cancel bad debts at the time it was decided that the credit is bad, the total amount reported as bad debt expenses negatively affect the income statement and the accounts receivable are reduced by the same amount, less assets
The other way is to determine a percentage of the total amount of accounts receivable as bad debts, there are many ways to analyze accounts receivable and calculate the value of bad debts.
When the company has the percentage of uncollectible accounts, the required journal entry is Bad Expenses (debit) with Reserve for Bad Accounts (credit)
At the time of cancellation, since the expenses were recognized before, we only use the Allowance for Uncollectible Accounts (Debit)  with accounts receivable (credit), with this we are recognizing the bad credit of the company.