At the beginning of? 2017, Delicious? Drinks, Inc. has the following account? balances: Accounts Receivable...
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Accounting
At the beginning of? 2017, Delicious? Drinks, Inc. has the following account? balances:
Accounts Receivable $41,000 (debit balance)
Allowance for Bad Debts $5,000 ?(credit balance)
Bad Debts Expense? $0
During the? year, credit sales amounted to $850,000. Cash collected on credit sales amounted to $750,000?, and $16,000 has been written off. At the end of the? year, the company adjusted for bad debts expense using the percent - of - sales method and applied a? rate, based on past? history, of 3.5% The ending balance of Accounts Receivable is? ________.
OPTIONS:
A. 41,000
B. 57,435
C. 16,000
D. 125,000
If you could please include an explanation, that would be great!
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