Question: Refer to the information in E5 19 but now assume that

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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