Suzuki supply reports the following amount at the end of 2012 (before adjustment) Credit sales for 2012 - $270,000 Accounts receivable, Dec 31, 2012 - 443,900 Allowances for uncontrollable accounts, Dec 31, 2012- 880 (credit)
1) Record the adjustment for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 8% of receivables will not be collected.
2) Record the adjustment for uncollectible accounts using the percentage-of-credit-sales method. Suzuki estimates 3% of credit sales will not be collected.
3) Calculate the effect on net income (before taxes) and total assets in 2012 for each method.