(Answered) The allowance for bad debts account has a credit balance of

Accounting

The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debts expense. The company's management estimates that 2% of net credit sales will be uncollectible for the year 2017. Net credit sales for the year amounted to $270,000.

What will be the balance of Allowance for Bad Debts on the December 31, 2017 balance sheet?

(a) $5,400
(b) $2,000
(c) $7,400
(d) $5,360

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