Salt Water Flow, Inc. makes the majority of its sales on account. During the year, the company reported total sales of $150,000. 10% of which were for cash; the remaining 90% were on account. The company uses the allowance method to account for bad debt and estimated that 1% of credit sales made during the year would be uncollectible. The balance in the allowance for doubtful accounts at the beginning of the year was $700. Which of the following statements is incorrect?

a) The balance in the allowance for doubtful accounts of $700 would not be factored into the calculation of the adjustment for uncollectible accounts.

b) A $500 account deemed uncollectible during the year, would result in a decrease to the allowance for doubtful accounts of $500.

c) The adjustment to account for bad debt would include an increase to the allowance for doubtful accounts of $1,500 and a decrease to retained earnings of $1,500.

d) During the year, a $250 account that was previously written off was collected. This transaction would have no direct impact on bad debt expense.

e) At year end, the accounts receivable balance minus the allowance for doubtful accounts would be reported in the asset section of the balance sheet.