On December 31, year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method of accounting for uncollectible accounts. In February of year 2, on of Loudoun's customers failed to pay his $1050 account and the account was written off. On April 4, year 2, the customer paid Loudoun the $1,050.

Which of the following answers correctly states the effect of Loudoun Company's February Year 2 entry to write off the customer's account?

	Assets	=	Liab.	+	Equity	Rev.	-	Expenses	=	Net Inc.	Cash Flow
A.	NA	=	NA	+	NA	NA	-	NA	=	NA	NA
B.	(1,050)	=	NA	+	(1,050)	(1,050)	-	NA	=	(1,050)	NA
C.	(1,050)	=	(1,050)	+	NA	NA	-	NA	=	NA	NA
D.	NA	=	1,050	+	(1,050)		-	1,050	=	(1,050)	NA

Multiple Choices

Option A

Option B

Option C

Option D