Allowance for Doubtful Accounts Has a Debit Balance of $2,500

Multiple Choice

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment) , and bad debt expense is estimated at 4% of credit sales. If credit sales are $800,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts

A) is $29,500
B) is $34,500
C) is $32,000
D) cannot be determined