AT&U Company
Data for the Year Ended December 31, Year

question 123

Multiple Choice

AT&U Company
Data for the year ended December 31, Year 1, are presented below:
$\begin{array}{llr} \text { Sales (credit) } &\$2,500,000\\ \text { Sales returns and allowances } &50,000\\ \text { Accounts receivable (December 31, Year 1) } &640,000\\ \text { Allowance for doubtful accounts} &\\ \text { (before adjustment at December 31, Year 1) } &20,000\\ \text {Estimated amount of uncollected accounts based on aging analysis } &45,000\\\end{array}$

-Refer to the figure AT&U Company.If the company estimates its bad debt to be 2% of net credit sales,what will be the balance in the allowance for doubtful accounts after the adjustment for bad debts?

• A) $19,000
• B) $20,000
• C) $49,000
• D) $69,000

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