Question

At December 31, Gill Co. reported accounts receivable of $248,000 and an allowance for uncollectible accounts of $1,400 (debit) before any adjustments. An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:

Answer 1

adjustment amount for uncollectible amounts = $3560

Step-by-step explanation:

correct option is A=$6540

given data:

receive amount =$248,000

uncollectible allowance (debit) prior to any adjustment = $1400

uncollectible amounts allowance = 2% * receive amount

Explanation:

the adjustment amount for uncollectible amounts = ( 248,000 *2%) -$1400

= $3560