Question

Refer to the information in E5–19, but now assume that the balance of the Allowance for Uncollectible Accounts on December 31, 2015, is $1,100 (debit) (before adjustment).
In E5–19, Suzuki Supply reports the following amounts at the end of 2015 (before adjustment).
Credit Sales for 2015.................. $260,000
Accounts Receivable, December 31, 2015............. 55,000
Allowance for Uncollectible Accounts, December 31, 2015.....1,100(credit)

Required:
1. Record the adjustment for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 12% of receivables will not be collected.
2. Record the adjustment for uncollectible accounts using the percentage-of-credit-sales method. Suzuki estimates 3% of credit sales will not be collected.
3. Calculate the effect on net income (before taxes) and total assets in 2015 for each method.



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  • CreatedJuly 15, 2014
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