Question: Graham Company uses the aging method in setting its allowance for doubtful receivables. Allowance for doubtful accounts prior to adjustment has a credit balance of

Graham Company uses the aging method in setting its allowance for doubtful receivables. Allowance for doubtful accounts prior to adjustment has a credit balance of $2,000 Management estimates that due to the economic crisis a higher level of allowance is necessary and decides that a $5,900 allowance is an appropriate amount at the year-end. The amount of expense to report on the income statement will be:

a. $3,900

b. $5,200

c. $1,000

d. $5,900

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