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30 January, 08:54

At december 31, gill co. reported accounts receivable of $244,000 and an allowance for uncollectible accounts of $1,350 (credit). 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:

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  1. 30 January, 09:01
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    Given:

    accounts receivable of $244,000

    allowance for uncollectible accounts of $1,350 (credit)

    1% of the accounts receivable should be the value of the allowance for uncollectible accounts.

    244,000 x 1% = 2,440

    2,440 - 1,350 = 1,090

    Adjusting entry:

    Debit Credit

    Bad Debt Expense 1,090

    Allowance for uncollectible accounts 1,090
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