InBeat CD Shop uses the percentage of net sales method of accounting for uncollectible accounts. At the end of the period, the following account balances appeared on InBeat’s trial balance: 

Instructions

1. In your working papers, calculate the amount of the adjustment for uncollectible accounts for the period ended June 30. Manage ment estimates that uncollectible accounts will be 1 percent of net sales.

2. Journalize the adjusting entry on page 8 in the general journal.

3. Post the adjusting entry to the general ledger accounts.

Transcribed Image Text:

Accts. Rec. Sales Sales Disc. $110,000 900,000 10,000 Allow. for Uncoll. Accts. Sales Ret. and Allow. Uncoll. Accts. Expense $ 4,000 50,000