At January 1, Davidson Services Has the Following Balances

question 162

Multiple Choice

At January 1, Davidson Services has the following balances: During the year, Davidson has $104,000 of credit sales, collections of $100,000, and write-offs of $1,400.
Davidson records Uncollectible account expense at the end of the year using the percent-of-sales method, and applies a rate of 1.1%, based on past history.
After the year-end entry to adjust the Uncollectible accounts expense, what is the ending balance in the Allowance for uncollectible accounts?

• A)Debit of $1,400
• B)Credit of $1,944
• C)Debit of $1,144
• D)Credit of $544

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