Question
In: Accounting
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 agoRelated Solutions
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Multiple
Choice
·
$1,585.
·
$7,700.
·
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·
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2
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