Use the transactions below to prepare an accounting equation for the accounts receivable balance and allowance for uncollectible. Also, explain why companies adopt the adjusted allowance method.

 

Following is a list of transactions for October 201X for Company A.

Oct. 1 Beginning Accounts Receivable balance is $49,000

Oct. 4 Collected $4,600 from a cash customer

Oct. 5 Collected $4,600, the amount due

Oct. 6 Provided Services of $5,000 on account

Oct. 7 Customer only partially paid invoice, $2,000

Oct. 12 Collected on the invoice that was previously written off $6,000

Oct. 17 Wrote off the uncollectable amount of $3,000

Oct. 31 Adjusted Allowance account, it is 1% of Accounts Receivable ending balance

1.