Dragonstar Industries had credit sales for the period of $85,000. The balance in Allowance for Doubtful Accounts is a debit of $827. How much will the credit be to Allowance for Doubtful Accounts if Dragonstar uses the percent of credit sales method of estimating uncollectible accounts and they estimate that 2% of credit sales will be uncollectible?
A) $873
B) $827
C) $2,527
D) $1,700
D) $1,700
Explanation: net credit sales × estimate percent uncollectible; ex: $85,000 × 2% = $1,700
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