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

question 77

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 new balance in the allowance for doubtful accounts account will be:

• A)$8,300.
• B)$5,400.
• C)$2,900.
• D)Cannot be determined from the information given.

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Gibbons V. Ogden

A landmark Supreme Court case in 1824 that clarified the federal government's exclusive power to regulate interstate commerce, underscoring the Constitution's commerce clause.

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