Answer:
The balance of Allowance for Uncollectible Accounts, after adjustment, will be $5,800
Explanation:
The computation of the balance of Allowance for Uncollectible Accounts is shown below:
= Estimated uncollectible amount + credit balance of Allowance for Uncollectible Accounts
= $2,800 + $3,000
= $5,800
The estimated uncollectible amount is shown below:
= Net credit sales × uncollectible percentage
= $140,000 × 2%
= $2,800
Both the items would be considered for computing the balance of the Allowance for Uncollectible Accounts.
The balance of Allowance for Uncollectible Accounts would be $5,800, after adjustment.
An allowance refers to the amount of money that is given or usually assigned at daily intervals for a particular purpose. In the context of children, parents may furnish an allowance to their children for their miscellaneous face-to-face spending.
The computation of the balance of Allowance for Uncollectible Accounts (BOUA):
[tex]= \text{Estimated Uncollectible Amount} + \text{Credit Balance of Allowance for Uncollectible Accounts}\\=\$2,800 + \$3,000\\= \$5,800[/tex]
The estimated uncollectible amount is shown below:
=[tex]=\text{Net Credit Sales}\times\text{ Uncollectible Percentage}}\\\\= \$140,000\times2\%\\\\ =\$2,800[/tex]
Both the portions would be seen for calculating the balance of the Allowance for Uncollectible Accounts.
Therefore, $5,800 is the balance of allowance after the adjustments.
To learn more about the allowances, refer to:
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