At December 31,Gill Co.reported accounts receivable of $238,000 and an allowance for uncollectible accounts of $600 (credit).An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable.The amount of the adjustment for uncollectible accounts would be:

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The correct answer is A because the adjustment for uncollectible accounts is calculated as follows:Allowance for uncollectible accounts = 3% of accounts receivable= 3% of $238,000= $7,140The current allowance for uncollectible accounts is $600, so the adjustment needed is:$7,140 - $600 = $6,540