Use the following information to answer questions 3 to 9:

In October 2019, you acquired a grocery store. To compete with the large grocery chains, you decide to offer some customers

credit terms of 30 days.

Total sales for the year ended September 30, 2020 were $900,000, of which $250,000 were on credit. Five

customers declared bankruptcy or left town without a forwarding address, and their accounts (which totaled $4,300) were written

off. The balance of the accounts

receivable, after the write off, was $24,700.

Total sales for the next fiscal year were $1,060.000, of

which $760,000 were for cash. Six customers' accounts totaling $5,400

were written off, and the ending balance in the accounts receivable was $31,900 as at September 30, 2021.

Assume for questions 3 to 6

that the percentage of credit sales method is used

to estimate bad debts expense for both fiscal

years, 2020 and 2021. Industry statistics indicate that bad debts average 3% of credit sales. (Hint: use T-accounts to keep track of

the various details.)

The ending balance of the allowance for doubtful accounts at September 30, 2021 is: O A. $3,200. O B. $3,600. O C. $6,800. O D. impossible to determine without additional information.