At the end of the year, Smith Company has the following information available: The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense. In the prior year, uncollectible accounts were estimated at 1% of credit sales. What action should Smith Company take in regards to uncollectible accounts at the end of the current year?

Question

At the end of the year, Smith Company has the following information available:  The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense. In the prior year, uncollectible accounts were estimated at 1% of credit sales. What action should Smith Company take in regards to uncollectible accounts at the end of the current year?

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The Answer of At the end of the year, Smith Company has the following information available:  The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense. In the prior year, uncollectible accounts were estimated at 1% of credit sales. What action should Smith Company take in regards to uncollectible accounts at the end of the current year?

At the End of the Year, Smith Company Has the Following