Problem: The accounts receivable balance for Pentil Inc. at year-end is $100,000. Before calculating and recording this year's bad debt expense, the Allowance for Doubtful accounts has a credit balance of $500. Credit sales for the year are $1,500,000. Historically, 1% of credit sales have not been collected. An aging of accounts receivable has resulted in an estimate that $16,000 of the year-end accounts receivable balance is uncollectible. Using the aging of accounts receivable method, the adjusted balance in the allowance for doubtful accounts at year-end will be: a. $500 b. $16,500 c. $16,000 d. $15,000 e. $15,500

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The accounts receivable balance for Pentil Inc. at year-end is $100,000. Before calculating and recording this year's bad debt expense, the Allowance for Doubtful accounts has a credit balance of $500. Credit sales for the year are $1,500,000. Historically, 1% of credit sales have not been collected. An aging of accounts receivable has resulted in an estimate that $16,000 of the year-end accounts receivable balance is uncollectible. Using the aging of accounts receivable method, the adjusted balance in the allowance for doubtful accounts at year-end will be:

a. $500

b. $16,500

c. $16,000

d. $15,000

e. $15,500

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