1. Record the adjusting entry for uncollectible accounts using the accountant's estimate of 8% of accounts receivable.

2. What is the revised amount of operating income?

3. By how much would total assets and operating income be misstated using a 5% amount instead of 8%?

Required information (The following information applies to the questions displayed below.) Willie Cheetum is the CEO of Happy Foods, a distributor of produce to grocery store chains throughout the Midwest. At the end of the year, the company's accounting manager provides Willie with the following information, before any adjustment. Accounts receivable $1,020,000 Estimated percentage uncollectible Allowance for uncollectible accounts $ 32,000 (credit) Operating income $ 252,000 88 Willie's compensation contract states that if the company generates operating income of at least $205,000, he will get a salary bonus early next year