What correct balance in allowance for uncollectible accounts

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Problem 1: The company uses the allowance method and wrote off an account receivable for $500. Which is true?

Group of answer choices

Option 1: Cash decreased $500.

Option 2: Bad debt expense increased $500.

Option 3: Accounts receivable decreased by $500.

Option 4: Net Accounts receivable decreased by $500.

Problem 2: On December 31st, the company's year-end, they had $50,000 of Account receivables and $200 in the Allowance for Uncollectible Accounts before the adjusting entries were prepared. Management expects 3% of the Account receivables to be uncollectible. After the adjusting entries are prepared; what would be the correct balance in the Allowance for Uncollectible Accounts?

Group of answer choices

Option 1: $200

Option 2: $1,300

Option 3: $1,500

Option 4: $1,700

Reference no: EM132669576

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