The Allowance for Doubtful Debts Account Had a Balance of $2200

Multiple Choice

The allowance for doubtful debts account had a balance of $2200 before bad debts of $1400 were written off and the allowance was adjusted to 10% of the accounts receivable balance of $20 000. The new amount of allowance for doubtful debts that is deducted from accounts receivable in the balance sheet is:

A) $1400.
B) $2000.
C) $1200.
D) $2200.