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At December 31, Gill Co. reported accounts receivable of $274,000 and an allowance for uncollectible accounts...

At December 31, Gill Co. reported accounts receivable of $274,000 and an allowance for uncollectible accounts of $1,500 (credit) before any adjustments. An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 1% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:

$1,500.

$1,240.

$2,740.

$950.

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Expert Solution

Notes: 1 CALCULATION OF PROVISION OF BAD DEBTS FOR THE YEAR END ON THE BASIS OF ACCOUNT RECIVABLE
Account Receivable $               2,74,000
Allowance for uncollectable accounts = $ 274,000 X 1% = $                     2,740
Notes: 2 Allowance for uncollectable Account = $                     2,740 Credit
Less: Opening Balance of uncollectable accounts $                     1,500 Credit
Balance need for ajustement $                     1,240 Credit
Answer = The amount of the adjustment for uncollectible accounts would be = Option 2 = $1,240

ekkarill92 answered 1 year ago
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