Allowance Method for Uncollectible Accounts

HEB Inc. had the following sales and accounts receivable balances, prior to adjustments at year-end. HEB Inc. uses the Percentage of Accounts Receivable at Year-end Method, to estimate its uncollectibles. HEB Inc. uses 4% of accounts receivable.

-What is the adjusting entry HEB Inc. should make at year-end?

(Please show you work)

DR. CR.

Credit Sales.... $20,000,000

Accounts Receivable$ 4,000,000

Allowance for Uncollectibles.. $70,000

-What is the year-end net realizable value of its account receivables?