In 2010, Freeze Company had credit sales of $900,000 and granted sales discounts of $18,000. On January 1, 2010, Allowance for Doubtful Accounts had a credit balance of $22,500. In 2010, $37,500 of uncollectible accounts receivable were written off. Past experience indicates that 3% of net credit sales become uncollectible. What should be the adjusted balance of Allowance for Doubtful Accounts on December 31, 2010?

Question 25 options:

1)

$11,460

2)

$12,000

3)

$26,460

4)

$49,500