Smart Art Is a New Establishment

Multiple Choice

Smart Art is a new establishment. During the first year, there were credit sales of $40,000 and collections of credit sales of $36,000. One account for $650 was written off. The company decided to use the aging-of-receivables method to account for bad debts expense, and estimated $500 as uncollectible at year end. Therefore, the ending balance in the Allowance for Bad Debts would be:

A) $150.
B) $800.
C) $200.
D) $500.