Amount of Allowance for Uncollectible Accounts Calculation

The amount of allowance for uncollectible accounts using the balance sheet approach would be $61,000.

Calculation of Allowance for Uncollectible Accounts

When determining the amount of allowance for uncollectible accounts using the balance sheet approach, several factors need to be considered. One of the key elements is the net realizable value (NRV) of the accounts receivable, which is crucial in estimating the amount of potential bad debts that may occur.

Write-Off and Recovery: In the given scenario, there was a write-off of $19,700 in receivables, of which $7,700 was later recovered. This means the net write-off amount is $19,700 - $7,700 = $12,000.

Existing Allowance: It is mentioned that the allowance for uncollectible accounts as of December 31, 2023, was $48,500. To calculate the new allowance amount, we need to add the net write-off to the existing allowance.

Calculation: $48,500 (existing allowance) + $12,000 (net write-off) = $61,000

Therefore, based on the balance sheet approach, the amount of allowance for uncollectible accounts would be $61,000. This figure reflects the estimated bad debts that the company is expected to incur based on the current financial information available.