At the beginning of the year,Robert Company's Allowance for Doubtful Accounts had a $3,200 credit balance.During January,a provision of 2% of sales was made for uncollectible accounts expense.During January,sales totaled $350,000,and $2,900 of accounts receivable were written off as worthless.No recoveries of accounts previously written off were made during the month.Robert's financial statements for January show:
A)Allowance for Doubtful Accounts with a credit balance of $10,200.
B)Allowance for Doubtful Accounts with a credit balance of $7,300.
C)Uncollectible Accounts Expense of $9,900.
D)Uncollectible Accounts Expense of $4,100.

Question

Quizplus · Accepted Answer

The provision for uncollectible accounts expense is 2% of $350,000, which is $7,000. Adding this amount to the beginning allowance balance of $3,200, we get a total of $10,200 in the allowance for doubtful accounts. However, $2,900 of accounts receivable were written off, which reduces the allowance balance to $7,300. Therefore, choice B is the correct answer. The uncollectible accounts expense is not provided in the question.

At the Beginning of the Year,Robert Company's Allowance for Doubtful