The Following Information Is from the 2019 Records of Fast

question 7

Multiple Choice

The following information is from the 2019 records of Fast Lane Racing Gear: $\begin{array}{|l|c|}\hline \text { Accounts receivable, December } 31,2019 & \$ 40,000 \text { (debit) } \\\hline \begin{array}{l}\text { Allowance for Bad Debts, December } 31,2019 \\\text { prior to adjustment }\end{array} & 1,700 \text { (debit) } \\\hline \text { Net credit sales for } 2019 & 178,000 \\\hline \text { Accounts written off as uncollectible during } \\ 2019& 17,000\\\hline\text { Cash sales during } 2019 & 32,000\\\hline\end{array}$ Bad debts expense is estimated by the aging-of-receivables method. Management estimates that $7,000 of accounts receivable will be uncollectible. Calculate the ending balance of Allowance for Bad Debts, after the adjustment for bad debts expense, at December 31, 2019.

• A) $5,340
• B) $10,400
• C) $8,000
• D) $7,000

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