1. Couldn't understand this question, show steps thanks.
Ally Company uses the aging method to adjust the allowance for uncollectible accounts at the end of the period. At December 31, 2019, the balance of accounts receivable is $210,000 and the allowance for uncollectible accounts has a credit balance of $3,000 (before adjustment). An analysis of accounts receivable produced the following age groups:
Based on past experience, Ally estimates that the percentages of accounts that will prove to be uncollectible within the three groups are 2%, 8%, and 20%, respectively. Based on these facts, the adjusting entry for bad debt expense should be made in the amount of:
A. $6,000
B. $9,000
C. $3,000
D. $13,000
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