Problem: The general ledger account for Accounts Receivable shows a debit balance of $40,000. The Allowance for Uncollectible Accounts has a credit balance of $2,000. Net sales for the year were $250,000. In the past, 3 percent of net sales have proved uncollectible. An aging of accounts receivable results in an estimate of $9,000 of uncollectible accounts receivable.
Calculate:
(1) Uncollectible Accounts Expense
(2) The ending balance of the Allowance for Uncollectible Accounts using (a) the Percentage of Net Sales method and (b) the Accounts Receivable Aging method.