[The following information applies to the questions displayed below.]On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method. On February 15, Year 2, one of Loudoun's customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2, this customer paid Loudoun the $1,050.Which of the following correctly states the effect of Loudoun Company writing off the customer's account? Assets=Liab.+Stk.EquityRev.?Exp.=Net Inc.Stmt of Cash FlowsA.NA NA NANA NA NANAB.(1,050) NA (1,050)(1,050) NA (1,050)NAC.(1,050) (1,050) NANA NA NANAD.NA 1,050 (1,050)NA 1,050 (1,050)NA
A. Option A
B. Option B
C. Option C
D. Option D
Answer: A
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