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What will be balance in the allowance for doubtful accounts

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Question - Wellington Corp. has outstanding accounts receivable totaling $5 million as of December 31 and sales on credit during the year of $25 million. There is also a debit balance of $20,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense?

a. $2,000,000.

b. $ 380,000.

c. $ 400,000.

d. $ 420,000.

Reference no: EM131866390

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