The credit manager of Montour Fuel has gathered the following information about the company's accounts receivable and credit losses during the current year:

Net credit sales for the year $ $7,500,000$

Accounts receivable at year$-$end $1,750,000$

Uncollectible accounts receivable:

Actually written off during the year $ $96,000$

Estimated portion of year$-$end receivables expected to prove uncollectible $($per aging schedule$)84,000180,000$

Uncollectible accounts expense is estimated at an amount equal to $2\mathrm{.}5$ percent of net credit sales.

Uncollectible accounts expense is recognized by adjusting the balance in the Allowance for Doubtful Accounts to the amount indicated in the year$-$end aging schedule. The balance in the allowance account at the beginning of the current year was $$25,000.($Consider the effect of the write$-$offs during the year on the balance in the Allowance for Doubtful Accounts.$)$

The company uses the direct write$-$off method of accounting for uncollectible accounts.

Prepare one journal entry summarizing the recognition of uncollectible accounts expense for the entire year under each of the above independent assumptions. $($If no entry is required for a transaction$/$event$,$ select $"$No Journal entry required" in the first account field.$)$

Answer rating: 100% (QA)

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