As of December 31,Mesa Company Has a Balance of $5,000

Multiple Choice

As of December 31,Mesa Company has a balance of $5,000 in trade receivables of which $500 is more than 30 days overdue.Mesa has a credit balance of $45 in the allowance for doubtful accounts.Mesa estimates its bad debts losses at 1% of current accounts and 10% of accounts over thirty days.What adjustment should Mesa make to the allowance for doubtful accounts?

A) $50 (credit) .
B) $55 (credit) .
C) $95 (credit) .
D) None,the current balance is correct.