Home / Questions / 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.
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