On 12/31/16, Phoebe Company's Balance Sheet Revealed a $7,000 Balance

Essay

On 12/31/16, Phoebe Company's balance sheet revealed a $7,000 balance in its allowance for doubtful accounts. During 2017, $2,000 of accounts were written off and $500 of accounts receivable previously written off were collected. On 12/31/17, bad debt expense was estimated to be 5% on net credit sales, which were $400,000. Calculate the balance in the allowance for doubtful accounts on 12/31/17.