The Following Information Is from the 2016 Records of Armand

question 12

Multiple Choice

The following information is from the 2016 records of Armand Camera Shop:
$$\begin{array} { | l | l | } \hline \text { Accounts receivable, 31 December 2016 }&\$ 44,000 \text { (debit) } \\\hline \text { Allowance for doubtfu l debts, 31 December 2016 } \\\text { prior to adjustment } & 1400 \text { (debit) } \\ \hline \text { Net credit sales for 2016 } & 177,000\\ \hline \text { Accounts written off as uncollectable during 2016 } & 14,000 \\\hline \text { Cash sales during 2016 } & 26,000 \\\hline\end{array}$$

Bad debts expense is estimated by the percentage of sales method.Management estimates that 5% of net credit sales will be uncollectable.The balance of the Allowance for doubtful debts after adjustment will be:

• A) $8750
• B) $10,250
• C) $11,550
• D) $7450

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