At the beginning of the year, Robert Company's Allowance for Doubtful Accounts had a $3,200 credit balance. During January, a provision of 2% of sales was made for uncollected accounts expense,. During January, sales totaled $350,000 and $2,900 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the month. Robert's financial statements for January show:_________
A. Allowance for doubtful accounts with a credit balance of $10,200
B. Allowance for doubtful accounts with a credit balance of $7,300
C. Uncollectible accounts expense of 9,900
D, Uncollectible accounts expense of $4,100

Respuesta :

Answer: B.Allowance for doubtful debt account will show a credit balance of $7300

Explanation:

Allowance for doubtful debt account will show a credit balance of $7300.

Allowance for doubtful debt balance = opening balance + allowance for doubtful debt for January - accounts receivable written off

doubtful debt for January = 350 000 x 2% = 7000

Allowance for doubtful debt  balance= $3200 + $7000 - $2900 = $7300