A company reports the following amounts at the end of 2024 (before adjustment). Credit Sales for 2024 Accounts Receivable, December 31, 2024 Allowance for Uncollectible Accounts, December 31, 2024 Required: 1. Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. The company estimates 11% of receivables will not be collected. 2. Record the adjusting entry for uncollectible accounts using the percentage-of-credit-sales method. The company estimates 1% of credit sales will not be collected. 3. Calculate the effect on net income (before taxes) and total assets in 2024 for each method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. The company estimates 11% of receivables will not be collected. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 Record the adjusting entry for uncollectible accounts. Note: Enter debits before credits. Date December 31, 2024 Record entry $240,000 35,000 1,200 (debit) General Journal Clear entry Debit Credit View general journal

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Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.  

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.