Refer to the information in E519, but now assume that the balance of the Allowance for Uncollectible
Question:
Refer to the information in E5–19, but now assume that the balance of the Allowance for Uncollectible Accounts on December 31, 2021, is $1,100 (debit) (before adjustment).
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 2021 for each method.
E5-19
Suzuki Supply reports the following amounts at the end of 2021 (before adjustment).
Step by Step Answer:
Financial Accounting
ISBN: 978-1259914898
5th edition
Authors: David Spiceland, Wayne M. Thomas, Don Herrmann