Allowance for Doubtful Accounts Has a Debit Balance of $980

Multiple Choice

Allowance for doubtful accounts has a debit balance of $980 at the end of the current year (prior to adjustment) . Net credit sales for the current period amount to $950,000 and 2.5% is estimated to be uncollectible. The adjusting entry would require a debit to:

A) bad-debt expense for $23,750.
B) allowance for doubtful accounts for $24,730.
C) allowance for doubtful accounts for $22,770.
D) accounts receivable accounts for $23,750.