The following information is from the 2017 records of Lane Bicycle Shop
Accounts receivable, December 31, 2017 $40,000 (debit)
Allowance for Bad Debts, December 31, 2017
prior to adjustment 1,900 (debit)
Net credit sales for 2017 177,000
Accounts written off as uncollectible during 2017 18,000
Cash sales during 2017 27,000
Bad debts expense is estimated by the aging-of-receivables method. Management estimates that $5,000 of accounts receivable will be uncollectible. Calculate the ending balance of Allowance for Bad Debts, after the adjustment for bad debts expense, at December 31, 2017.
A) $5,310
B) $8,800
C) $9,000
D) $5,000
D .Under the aging-of-receivables method, the Allowance for Bad Debts account is adjusted to the total amount estimated to be uncollectible.
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