Question - A company has net sales of $50,000 during the year. At year end (before an adjustment is made), Allowance for Uncollectible Accounts has a credit balance of $2,500. If the company estimates that 3 percent of net sales are uncollectible, what is the balance in the allowance account after the year-end adjustment has been made using the percentage of net sales method?
$1,500 debit balance
$1,500 credit balance
$4,000 credit balance
$1,000 debit balance