In 2018, Boyle Company Had Credit Sales of $900,000

Multiple Choice

In 2018, Boyle Company had credit sales of $900,000. On January 1, 2018, Allowance for Doubtful Accounts had a credit balance of $22,500. During 2018, $36,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance balance should be 10% of the accounts receivable become uncollectible. What should be the required adjustment to the Allowance for Doubtful Accounts at December 31, 2018 if the ending accounts receivable balance was $240,000?

A) $37,500
B) $24,000
C) $36,000
D) $46,500