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At December 31, ABC reported accounts receivable of $272,000 and an allowance for uncollectible accounts of $1,350 (credit) before any adjustments. 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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Answer: $1,370

Explanation:

The adjustment for uncollectible accounts would be;

= Amount of receivables to be uncollected - Credit balance in Allowance for uncollectible accounts

= (1% * 272,000) - 1,350

= 2,720 - 1,350

= $1,370

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