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The following information is provided for the Dawdy Company at December 31, Year3, just before any adjusting entries were made. All balance are normal (debit

The following information is provided for the Dawdy Company at December 31, Year3, just before any adjusting entries were made. All balance are normal (debit vs. credit) unless I indicate otherwise.

Net Credit Sales during Year3

$900,000

Accounts Receivable Balance at 12/31/Year3

120,000

Allowance for Uncollectible Accounts (debit balance) at 12/31/Year3 (abnormal balance)

3,000

Assume Dawdy prepared the following aging of accounts receivable at December 31, Year3.

Age

Accounts Receivable

Percentage

Estimated Uncollectible

Estimate of uncollectible amount

Current

$80,000

10%

8,000

31-60 days

20,000

15%

3,000

61-90 days

15,000

30%

4,500

Over 90 days

5,000

40%

2,000

Totals

$120,000

$17,500

After the adjusting entry, the balance in the Allowance for uncollectible accounts will be:

A.

17500

B.

14500

C.

6500

D.

23500

E.

20500

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