Claire Corporation has annual credit sales of $4,000,000 each year. Based upon the fabric industry's and Claire Corporation's history, it appears that approximately .5% of all credit sales will not be collected.

The current accounts receivable balance is $275,000.

An aging of the accounts receivable calculates that, based upon age, $25,000 of the receivables will not be collected.

Q1.Using the percentage of sales method:

1. What will be the amount of uncollectible accounts expense represented on the Income Statement of Claire Corporation?

2. What will be represented on the Claire Corporation Balance Sheet as net accounts receivable, i.e. Accounts receivable less Allowance for Uncollectible Accounts?

Q2.Using the aging method:

1. What will be the amount of uncollectible accounts expense represented on the Income Statement of Claire Corporation?

2. What will be represented on the Claire Corporation Balance Sheet as net accounts receivable, i.e. Accounts receivable less Allowance for Uncollectible Accounts?

Q3.What should be the deciding factor(factors) for determing the valuation method?