On December 31, Year 1, the Loudoun Corporation esumated that 3% of its credit sales of 5112.500 would be uncollectible. Loudoun uses the allowance method of accounting for uncollectible accounts In February of Year 2, one of Loudoun's customers failed to pay his $1.050 account and the account was written off On April 4. Year 2, this customer paid Loudoun the $1,050.

Which of the following answers correctly states the effect of the December 31, Year 1 adjusting entry for uncollectible accounts on the financial statements of the Loudoun Corporation?

Option C

Option A

Option B

Option D

A. B. C. D. Assets (3,375) (3,375) 3,375 NA = - Liab. + 3,375 + NA + NA + + Equity NA (3,375) 3,375 Rev. NA NA 111 Expenses 3,375 (3,375) . M Net Inc. NA - (3,375) 3,375 NA M Cash Flow 3,375 0A NA