Mellon Corporation
The data presented below are for Mellon Corporation for the year ended December 31,2017:
??
$\begin{array}{lr}
\text { Sales (100\% on credit) } & \$ 1,500,000 \
\text { Sales returns } & 60,000 \
\text { Accounts receivable (December 31, 2017) } & 250,000 \
\text { Allowance for doubtful accounts (credit balance) (before adjustment at December } & \
31,2017 & 3,000 \
\text { Estimated amount of uncoll ectible accounts based on an aging analysis } & 31,000
\end{array}$
-Refer to the data for Mellon Corporation. ?
If Mellon uses 2% of net credit sales to estimate its bad debts,what will be the balance in the Allowance for Doubtful Accounts account after the adjustment for bad debts?
A)$33,000
B)$31,800
C)$27,000
D)$25,800

Question

Mellon Corporation
The data presented below are for Mellon Corporation for the year ended December 31,2017:
??
 $\begin{array}{lr}
\text { Sales (100\% on credit) } & \$ 1,500,000 \
\text { Sales returns } & 60,000 \
\text { Accounts receivable (December 31, 2017) } & 250,000 \
\text { Allowance for doubtful accounts (credit balance) (before adjustment at December } & \
31,2017 & 3,000 \
\text { Estimated amount of uncoll ectible accounts based on an aging analysis } & 31,000
\end{array}$
-Refer to the data for Mellon Corporation. ?
If Mellon uses 2% of net credit sales to estimate its bad debts,what will be the balance in the Allowance for Doubtful Accounts account after the adjustment for bad debts?
A)$33,000
B)$31,800
C)$27,000
D)$25,800

Quizplus · Accepted Answer

Given that Mellon Corporation uses 2% of net credit sales to estimate its bad debts, and without the specific net credit sales figure provided in the question, we can deduce the correct answer by understanding the process. The balance in the Allowance for Doubtful Accounts after the adjustment is calculated by applying the 2% rate to the net credit sales. Since the exact figure of net credit sales is not provided, we cannot calculate the exact amount. However, the correct process involves multiplying the net credit sales by 2% to estimate bad debts, which would then be reflected in the Allowance for Doubtful Accounts. The choice provided here as correct (B) is based on the understanding of the process rather than the specific calculation from the data, which is not provided.

Mellon Corporation the Data Presented Below Are for Mellon Corporation

Mellon Corporation
the Data Presented Below Are for Mellon Corporation