Eastern Supply uses the allowance method in accounting for uncollectible accounts with the estimate based on the aging-of-accounts-receivable method. The company had the following account balances on August 31, 2023:

The following transactions took place during September 2023:

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 September 30 if the company used the percent-of-sales method with an estimate of uncollectibles equal to 8 percent of credit sales?

3. Which of the two methods of estimating uncollectible accounts would normally be more accurate? Why?

Transcribed Image Text:

Accounts Receivable Allowance for Doubtful Accounts (credit balance) $687,000 72,600