Answer:
Gill Co.
The amount of the adjustment for uncollectible accounts would be:
$13,000
Explanation:
a) Data and Calculations:
Accounts Receivable = $286,000
Allowance for uncollectible accounts = $1,300 (credit balance)
Allowance should be = 5% of accounts receivable
= $286,000 * 5% = $14,300
The adjustment = $13,000 ($14,300 - $1,300)
b) The adjustment of $13,000 will bring the credit balance to a total of $14,300, which is the required allowance for the year. The adjustment is to debit the Uncollectible Expense account with $13,000 and credit the Allowance for Uncollectible Accounts with $13,000.
