Net credit sales for the month are ($ 800,000). The accounts receivable balance is ($ 160,000). The

Question:

Net credit sales for the month are $\$ 800,000$. The accounts receivable balance is $\$ 160,000$. The allowance is calculated as $7.5 \%$ of the receivables balance using the percentage-of-receivables basis. If Allowance for Doubtful Accounts has a credit balance of $\$ 5,000$ before adjustment, what is the balance after adjustment?

(a) $\$ 12,000$

(c) $\$ 17,000$

(b) $\$ 7,000$.

(d) $\$ 31,000$

(b) $\$ 7,000$.

(d) $\$ 31,000$

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