$1$

A company reports the following amounts at the end of Year $1($before adjustment$)$:

Year $1$ Credit Sales

Accounts Receivable, December $31$

$ Reported

$500,000$

$60,000$

$2,500$ Credit

$ Reported

$2,500$ Credit

Allowance for Uncollectible Accounts, December $31$

Record the adjusting entry for uncollectible accounts using the percentage$-$of$-$receivables method. The company estimates $6\%$ of receivables will not be collected.

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