Morrow Inc

Multiple Choice

Morrow Inc.uses the percentage of credit sales method of estimating doubtful accounts.The Allowance for Doubtful Accounts has an unadjusted credit balance of $2,700 and the company had $140,000 of net credit sales during the period.Morrow has experienced bad debt losses of 6% of credit sales in prior periods.After making the adjusting entry for estimated bad debts,what is the ending balance in the Allowance for Doubtful Accounts account?

A) $11,100
B) $8,400
C) $8,238
D) $5,700