It means use the income statement.

Name HMWK Chapter 5 Spiceland 3 | Page Problem 4 Physicians' Hospital has the following balances on December 31, before any adjusting entries: Net Sales $300,000 Accounts receivable $50,000; Allowance for uncollectible accounts-$1,000 (credit)On December 31, Physicians estimates uncollectible accounts to be 20% of accounts receivable Required: 1. Record the adjusting entry for uncollectible accounts on December 31. Using the balance sheet method 2. Calculate the net realizable value of accounts receivable given part 1 3. Record the adjusting entry if you decide to use the income statement instead of the balance sheet method. A/R given part 3 4. Calculate the net realizable value