As of January 1,2016,Farley Co.had a credit balance of $520,000 in its allowance for uncollectible accounts.Based on experience,2% of Farley's credit sales have been uncollectible.During 2016,Farley wrote off $650,000 of accounts receivable.Credit sales for 2016 were $18,000,000.In its December 31,2016,balance sheet,what amount should Farley report as allowance for uncollectible accounts?

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The correct answer is A.The allowance for uncollectible accounts should be $230,000. This is calculated by taking the beginning balance of $520,000, adding the amount of bad debts written off during the year ($650,000), and then subtracting the amount of credit sales for the year multiplied by the uncollectible percentage (2%). This calculation results in an allowance for uncollectible accounts of $230,000.