Halifax Supplies uses the allowance method to account for uncollectible accounts with the estimate based on an aging of accounts receivable. The company had the following account balances on September 30, 2020 :

Required
1. Record the above transactions in the general journal. Show all amounts to two decimal places.
2. What would be the adjusting entry required on October 31 if the company used the percent-of-sales method with an estimate of uncollectibles equal to 4 percent of sales on account?
3. Which of the two methods of estimating uncollectible accounts would normally be more accurate? Why?

Transcribed Image Text:

Accounts Receivable $1,947,000 Allowance for Doubtful Accounts (credit balance) 56,000