Jensen Corporation Uses the Percentage-Of-Sales Method to Estimate Uncollectibles

Question 99
Multiple Choice

Jensen Corporation uses the percentage-of-sales method to estimate uncollectibles.Net credit sales for the current year amount to $2,000,000 and management estimates 2% will be uncollectible.The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $16,000.After all necessary adjusting entries are made,the balance in Allowance for Uncollectible Accounts will be: A)$16,000. B)$16,320. C)$24,000. D)$40,000.