Question - Calculation of Allowance for Uncollectibles

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Question - Calculation of Allowance for Uncollectibles using Percent of Revenue Method

Background Information: Donald Duck and Friends began operations on January 1, 2017. The following events occurred during the year.

1. Provided lawn services on account for $90,000.

2. Collected $82,000 cash from accounts receivable.

3. Paid salaries to Mickey for the year of $30,000.

4. Company estimates 2% of the on account revenue to be uncollectible based on percent of revenue method.

Required -

a) Complete the accounting equation for the different transactions.

b) Prepare an income statement for 2017.

Reference no: EM132568217

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