During its first year of operations, Old Tyme Furniture Restoration, Inc., had sales of $461,000, all on

Question:

During its first year of operations, Old Tyme Furniture Restoration, Inc., had sales of $461,000, all on account. Industry experience suggests that Old Tyme's uncollectibles will amount to 4% of credit sales. At December 31, 2016, total $56,000. The company uses the allowance method to account for uncollectibles. (Assume that there are no expected sales refunds or sales returns for this exercise.)
1. Make Old Tyme's journal entry for uncollectible-account expense using the percent-of-sales method.
2. Show how Old Tyme should report on its at December 31,2016.

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