The Allowance for Doubtful Debts Currently Has a Credit Balance

question 32

Multiple Choice

The Allowance for doubtful debts currently has a credit balance of $200. The company's management estimates that 2.5% of net credit sales will be uncollectable. Net credit sales are $115 000. What will be the balance of the Allowance for doubtful debts reported on the balance sheet?

• A)$3 275
• B)$2 875
• C)$3 075
• D)$2 675

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