Question

Davidoff Company reported net credit of $735,000 on account for the year ending December 31, 2016. On January 1, 2016, the Allowance for Doubtful Accounts had a credit balance of $18,000. During 2016, $30,000 of uncollectible accounts receivable were written off. Davidoff has experienced bad debt losses of 3% of credit sales in prior periods. Using the percentage of credit sales method, what is the adjusted balance in the Allowance for Doubtful Accounts at December 31, 2016?

A) $10,050

B) $10,500

C) $22,050

D) $34,500

Answer

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