Ask Question
9 March, 18:23

At December 31, Gill Co. reported accounts receivable of $236,000 and an allowance for uncollectible accounts of $1,900 (debit) before any adjustments. An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. The amount of the adjustment for uncollectible accounts would be:

+4
Answers (1)
  1. 9 March, 20:55
    0
    The amount of the adjustment for uncollectible accounts would be $ 5,180.

    Explanation:

    To calculate the Adjustment for allowance for uncollectible accounts you have to perform the following:

    Gross accounts receivable is $ 236,000

    Allowance for uncollectible accounts 3%

    236,000 * 3% = 7,080. Required Balance in allowance for uncollectible accounts.

    Less: Existing credit balance $ 1900

    Required Adjustment = $7,080 - $ 1900 = $ 5,180

    Required balance is 3% of $238,000 that is $7,140. Already exists $ 1,900 credit balance which makes a required adjustment of $5,180 only.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “At December 31, Gill Co. reported accounts receivable of $236,000 and an allowance for uncollectible accounts of $1,900 (debit) before any ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers