Van Gogh Company uses the aging method to adjust the allowance for uncollectible accounts at the...

 

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Van Gogh Company uses the aging method to adjust the allowance for uncollectible accounts at the end of the period. At December 31, the balance of accounts receivable is $240,000 and the allowance for uncollectible accounts has a credit balance of $5,000 (before adjustment). An analysis of accounts receivable produced the following age groups: (Click to open the accounts receivable aging information.) Based on past experience, Van Gogh estimates that the percentage of accounts that will prove to be uncollectible within the three age groups is 2%, 8%, and 20%, respectively. Based on these facts, the adjusting entry for uncollectible accounts should be made in the amount of A. $9,600. B. $5,000. C. $4,600. D. $14,600. Van Gogh Company uses the aging method to adjust the allowance for uncollectible accounts at the end of the period. At December 31, the balance of accounts receivable is $240,000 and the allowance for uncollectible accounts has a credit balance of $5,000 (before adjustment). An analysis of accounts receivable produced the following age groups: (Click to open the accounts receivable aging information.) Based on past experience, Van Gogh estimates that the percentage of accounts that will prove to be uncollectible within the three age groups is 2%, 8%, and 20%, respectively. Based on these facts, the adjusting entry for uncollectible accounts should be made in the amount of A. $9,600. B. $5,000. C. $4,600. D. $14,600.