Alderwood Company has provided the following information prior to any year-end bad debt adjustment:
Cash sales: $468,000
Credit sales: $1,404,000
Selling and administrative expenses: $384,000
Sales returns and allowances: $144,000
Gross profit: $1,524,000
Accounts receivable: $384,000
Sales discounts: $96,000
Allowance for doubtful accounts credit balance: $4,320
Alderwood estimates bad debt expense assuming that 1.5% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?
Multiple Choice
$24,930.
$25,380.
$21,060.
$16,740.