The Gold Tee Company had a balance for doubtful accounts in the amount of $10,50

Question

The Gold Tee Company had a balance for doubtful accounts in the amount of $10,500 on June 1, 2003, the beginning of the year. The following transactions required journal entries occurred during the year:
July 15, 2003, A. Palmer's account in the amount of $5,600 was determined to be uncollectible.
Sept. 30, 2003, G. McCord paid back $4,500 that had been written off the previous year.
Nov. 16, 2003, A. Sorenstan's account in the amount of $6,500 was determined to be uncollectible.
May 31, 2004, bad debts were estimated to be 1/2 of 1% of credit sales amounting to $525,000.
On the May 31, 2004 balance sheet, the following amount should appear in the allowance for doubtful accounts: a.$2,625 b. $2,900 c. $5,250 d. $5,525

Explanation / Answer

                            Allowance for doubtful accounts
                                              Beginning balance           $10,500
A/R - A.Palmer         $5,600     A/R - G. macCord            $4,500
A/R - A.Sorenstan    $6,500
Ending Balance      $2,900
                            ________________________________________
                            $15,000                                          $15,000
                           =========================================

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