Question

At December 31, Tremble Music had account balances in Accounts Receivable of $400,000 and in Allowance for Uncollectible Accounts of $1,000 (credit balance) before any adjustments. An analysis of Tremble's December 31 accounts receivable suggests that 4% of the account balances are not expected to be collected. The balance of Allowance for Uncollectible Accounts after adjustment will be:_______.

A. $1,000.
B. $16,000.
C. $14,000.
D. $15,000.

Answer 1

B. $16,000.

Step-by-step explanation:

The computation of the balance of Allowance for Uncollectible Accounts after adjustment is shown below:

= Account receivable × estimated percentage

= $400,000 × 4%

= $16,000

By multiplying the account receivable with the estimated percentage we can get the uncollectible amount

Hence, all other formation which is mentioned is not relevant. Hence, ignored it