Question

At December 31, Gill Co. reported accounts receivable of $246,000 and an allowance for uncollectible accounts of $1,200 (debit) before any adjustments. An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 4% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:

Answer 1

Answer:

the amount of the adjustment for uncollectible accounts would be $11,040

Explanation:

The computation of the amount of the adjustment for uncollectible accounts would be given below:

= Account receivable × uncollectible percentage + debit balance of the uncollectible accounts

= $246,000 × 4% + $1,200

= $9,480 + $1,200

= $11,040

Hence, the amount of the adjustment for uncollectible accounts would be $11,040