Exercise $5-20($Algo$)$ Compare the percentage$-$of$-$receivables method and the percentage$-$of$-$credit$-$sales method $($LO$5-9)$

Suzuki Supply reports the following amounts at the end of $2024($before adjustment$).$

Credit Sales for $2024$

Accounts Receivable, December $31,2024$

Allowance for Uncollectible Accounts, December $31,2024$

$$245,000$

$40,000$

$1,000$

$(debit)$

Required:

Record the adjusting entry for uncollectible accounts using the percentage$-$of$-$receivables method. Suzuki estimates $10\%$ of receivables will not be collected.

Record the adjusting entry for uncollectible accounts using the percentage$-$of$-$credit$-$sales method. Suzuki estimates $2\%$ of credit sales will not be collected.

Calculate the effect on net income $($before taxes$)$ and total assets in $2024$ for each method.