A business has a starting allowance for bad debts of $3,000 (Credit). It has credit sales of

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Question:

A business has a starting allowance for bad debts of $3,000 (Credit). It has credit sales of $100,000 over the year and management estimates 15% are noncollectable. Based on this information what should the balance of the Allowance for Bad Debts be at the end of the year?

18,000 (Credit)

18,000 (Debit)

12,000 (Credit)

15,000 (Credit)