As of December 31, 2017, Gill Co. reported accounts receivable of $216,000 and an allowance for uncollectible accounts of $8,400. During 2018, accounts receivable increased by $22,000 (that change includes $7,800 of bad debts that were written off). An analysis of Gill Co.'s December 31, 2018, accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. Bad debt expense for 2018 would be: $6,540. $7,800. $7,140. None of these answer choices are correct.

As of December 31, 2017, Gill Co. reported accounts receivable of $216,000 and an allowance for uncollectible accounts of $8,400. During 2018, accounts receivable increased by $22,000 (that change includes $7,800 of bad debts that were written off). An analysis of Gill Co.'s December 31, 2018, accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. Bad debt expense for 2018 would be: $6,540. $7,800. $7,140. None of these answer choices are correct.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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