At 1 January, Everbright Sales Has the Following Balances

Multiple Choice

At 1 January, Everbright Sales has the following balances: During the year, Everbright had $150 000 of credit sales, collections of $140 000, and write- offs of
$3 000. Everbright records Bad debts expense at the end of the year using the ageing- of- accounts method. At the end of the year, the ageing analysis produces a figure of $1 900, being the estimate of bad debts at end of year.
Before the year- end entry to adjust the Bad debts expense is made, what is the balance in the Bad debts expense?

A) Credit of $544
B) Debit of $1 400
C) Zero balance
D) Credit of $1 944