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False Value Hardware began 2013 with a credit balance of $32,000 in the allowance for...

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Accounting

False Value Hardware began 2013 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $700,000 and $660,000, respectively. False Value estimates that 5% of all sales will be returned. During 2013, customers returned merchandise for credit of $25,000 to their accounts. What is the balance in the allowance for sales returns account at the end of 2013?

a.$60,000. b.$7,000. c. $35,000. d. $42,000.

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