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, 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? Rev. - - A. 3. C. D. Assets (3,375) (3.375) 3,375 NA Liab. 3,375 NA NA NA + + + + + Equity NA (3,375) 3,375 NA Expenses NA 3,375 (3,375) NA Net Inc. Cash Flow NA - (3,375) 3,375 3,375 OA NA NA NA NA Multiple Choice Options Option