Response to the following problem:
During its first year of operations, Spring Break Travel earned revenue of $500,000 on account. Industry experience suggests that Spring Break's bad debts will amount to 2% of revenues. At December 31, 20X3, accounts receivable total $90,000. The company uses the allowance method to account for uncollectibles.
1. Journalize Spring Break Travel's uncollectible-account expense using the percent-of sales method.
2. Show how Spring Break should report accounts receivable on its balance sheet at December 31, 20X3.