Data for the year ended December 31 are presented below.Sales (100% on credit)

-Refer to A&B Foods. If the company uses 4% of net credit sales to estimate its bad debts, what will be the balance in the Allowance for Doubtful Accounts account after the adjustment for bad debts?

Question

Data for the year ended December 31 are presented below.Sales (100% on credit)
 
-Refer to A&B Foods. If the company uses 4% of net credit sales to estimate its bad debts, what will be the balance in the Allowance for Doubtful Accounts account after the adjustment for bad debts?

Quizplus · Accepted Answer

Using the 4% of net credit sales to estimate bad debts means multiplying the net credit sales by 4%. If the net credit sales are not provided in the question, it's impossible to calculate the exact figure without additional information. However, the correct answer is identified as B, which suggests that the specific calculation based on given or previously known data points to $103,000 as the balance in the Allowance for Doubtful Accounts after the adjustment.

Data for the Year Ended December 31 Are Presented Below