The following information pertains to Lightning Inc., at the end of the year:
Credit Sales $ 60,000
Accounts Payable 10,000
Accounts Receivable 7,000
Allowance for Uncollectible Accounts 400 credit
Cash Sales 20,000
Lightning uses the percentage-of-credit-sales method and estimates 1% of sales are uncollectible. What is the ending balance of the allowance account after the year-end adjustment?
A) $600.
B) $1,000.
C) $200.
D) $1,200.
Answer: $1,000.
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