Historical Art Is a New Business

Multiple Choice

Historical Art is a new business.During its first year of operations,credit sales were $55,000 and collections on credit sales were $33,000.One account of $500 was written off.Management uses the percent-of-sales method to account for bad debts expense and estimates 3% of credit sales to be uncollectible.The ending balance of Allowance for Bad Debts account is ________.

A) $1150
B) $1650
C) $645
D) $2625