The ending balance of the allowance account after the year-end would be $7,000.
An allowance is an amount of money given, normally at regular intervals, for a specific purpose. The person who provides the allowance usually attempts to control how or when money is spent by the receiver so that it meets the aims of the person providing the money.
given that,
Balance in allowance of uncontrollable account = $1,400,
Total Bad debts =
[tex]=\$70000\times\dfrac{8}{100}\\\\=\$5,600.[/tex]
The ending balance of allowance:
Opening balance of uncollectable amount=A,
Total bad debts= B,
Closing the balance of the uncollectable amount.= C.
[tex]\text{A+B}=\text{C}\\\\\$5,600+\$1,400=\text{Closing Balance of uncollectable amount}\\\\\$7,000=\text{Closing Balance of uncollectable amount}.[/tex]
Therefore, the amount of ending balance would be$7,000.
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