On January 1st, 2015, Everlight Corp

Multiple Choice

On January 1st, 2015, Everlight Corp. has the following balances: During the year, Everlight has $150,000 of credit sales, collections of credit sales of $140,000, and write-offs of $3,000. It records bad debts expense at the end of the year using the aging-of-receivables method. At the end of the year, aging analysis produces a figure of $1,900, being the estimate of uncollectible accounts. Before the year-end entry to adjust the bad debts expense is made, the balance in the Allowance for Bad Debts expense would be:

A) debit of $1,800.
B) credit of $4,200.
C) zero balance.
D) debit of $3,000.