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