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At the end of the year a company reports a balance in its Allowance for Uncollectible

At the end of the year, a company reports a balance in its Allowance for Uncollectible Accounts of $1,400 (debit) before any year-end adjustment. The company estimates future uncollectible accounts to be 3% of credit sales for the year. Credit sales for the year total $280,000. Record the adjustment for the allowance for uncollectible accounts using the percentage-of-credit-sales method?

 

 

166. A company reports the following amounts at the end of the year (before any year-end adjustment).

 

Credit sales for the year

$120,000

 

Accounts receivable

36,000

 

Allowance for uncollectible accounts

1,500

(credit)

     

 

Record the adjustment for uncollectible accounts (1) using the percentage-of-receivables method, assuming the company estimates 10% of receivables will not be collected, and (2) using the percentage-of-credit-sales method, assuming the company estimates 2% of credit sales will not be collected.

Jan 27 2020 View more View Less

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