Question

During 2021, Jacobsen wrote off $19,300 in receivables and recovered $7,300 that had been written off in prior years. Jacobsen's December 31, 2020, allowance for uncollectible accounts was $46,500. Using the balance sheet approach, what amount of allowance for uncollectible accounts should Jacobsen report at December 31, 2021?

Answer 1

Answer:

Allowance that will be reported at December 31, 2021  at $46,500

Explanation:

The Amount of Trade Receivables shown in the Balance Sheet must be a faithful representation of what the Company expects to receive from its sales on Account.

The figure of Accounts Receivables is arrived at by Deducting Accounts Written Off and Allowance for Doubtful debts.

Allowance that will be reported at December 31, 2021 remains at $46,500.

Answer 2

Answer:

58,500

Explanation:

Begining balance of allowance for uncollectible amounts (1/1//2021) = 46,500

During the year, this balance increases by 19,300 because Jacobsen writes off a new amount of $19,300

At the same time, the balance decreases by 7,300 because Jacobsen recovers the amount which was written off in previous years ($7300)

Thus the ending balance of allowance for uncollectible amounts at 31/12/20221 would be:

46,500 + 19,300 - 7,300 = 58,500