HelleniCo starts the year with a $7,500 allowance for doubtful debts (credit balance). At the end of the year, HelleniCo has $250,000 of receivables and estimates 4% will be uncollectible given past business experience. Assuming HelleniCo utilises the percentage of receivables approach, calculate the ending balance of allowance for bad debts.

possible answers:

a) $17,500

b) $2,500

c) $7,500

D) $10,000