Question
Suzuki Supply reports the following amounts at the end of 2018 (before adjustment). Credit Sales for 2018 $256,000 Accounts Receivable, December 31, 2018 51,000 Allowance
Suzuki Supply reports the following amounts at the end of 2018 (before adjustment).
Credit Sales for 2018 | $256,000 | |
Accounts Receivable, December 31, 2018 | 51,000 | |
Allowance for Uncollectible Accounts, December 31, 2018 | 1,000 | (Credit) |
1. Record the adjustment for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 10% of receivables will not be collected. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Record the adjustment for uncollectible accounts using the percentage-of-credit-sales method. Suzuki estimates 2% of credit sales will not be collected. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
3. Calculate the effect on net income (before taxes) and total assets in 2018 for each method. Suzuki estimates 10% of receivables and 2% of credit sales respectively will not be collected.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started