A company has net sales of $50,000 during the year. At year end (before an adjustment is made), Allowance for Uncollectible Accounts has a credit balance of $2,500 . If the company estimates that 3 percent of net sales are uncollectible and the company uses percentage of net sales method, what is the balance in the allowance account after the year-end adjustment has been made?
a. $1,500 debit balance
b. $1,500 credit balance
c. $4,000 credit balance
d. $1,000 debit balance
C
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