Before Adjustment,the Allowance for Doubtful Accounts Has a Credit Balance

question 97

Multiple Choice

Before adjustment,the allowance for doubtful accounts has a credit balance of $2,700.The company had $140,000 of net credit sales during the period and historically fails to collect 4% of credit sales.The company uses the percentage of credit sales method of estimating doubtful accounts.After adjusting for estimated bad debts,the ending balance in the allowance for doubtful accounts account will be:

• A)$8,300.
• B)$5,400.
• C)$2,900.
• D)$5,600.

---

Definitions:

Iron content

The amount of iron, a vital mineral for human health, present in certain substances or objects.

Infant formula

A manufactured food designed and marketed for feeding to babies and infants under 12 months of age, usually prepared for bottle-feeding or cup-feeding from powder or liquid.

Cow's milk

A common dairy product obtained from the milk of cows, used as a beverage or food ingredient.

Solid foods

Foods that are not liquid or pureed, introduced to an infant’s diet typically around six months of age to complement breastmilk or formula.