During its first year of operations, Signature Lamp Company earned revenue of \(\$ 350,000\) on account. Industry experience suggests that bad debts will amount to \(2 \%\) of revenues. At December 31, 2008, accounts receivable total \(\$ 40,000\). The company uses the allowance method to account for uncollectibles.

1. Journalize Signature's uncollectible-account expense using the percent-of-sales method.

2. Show how to report accounts receivable on the balance sheet at December 31, 2008. 

Follow the first reporting format illustrated.