Calculate the effect on net income

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Reference no: EM131520838

Question: Refer to the information in E5-19, but now assume that the balance of the Allowance for Uncollectible Accounts on December 31, 2012, is $1,000 (debit) (before adjustment).

Required: 1. Record the adjustment for uncollectible accounts using the percentage-ofreceivables method. Suzuki estimates 10% of receivables will not be collected.

2. Record the adjustment for uncollectible accounts using the percentage-of-creditsales method. Suzuki estimates 2% of credit sales will not be collected.

3. Calculate the effect on net income (before taxes) and total assets in 2012 for each method.

E5-19: Suzuki Supply reports the following amounts at the end of 2012 (before adjustment)

Required: 1. Record the adjustment for uncollectible accounts using the percentage-ofreceivables method. Suzuki estimates 10% of receivables will not be collected.

2. Record the adjustment for uncollectible accounts using the percentage-of-creditsales method. Suzuki estimates 2% of credit sales will not be collected.

3. Calculate the effect on net income (before taxes) and total assets in 2012 for each method.

Reference no: EM131520838

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