In 2020, Warehouse 13 had net credit sales of $850,000. On January 1, 2020, Allowance for Doubtful Accounts had a credit balance of

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Question:

In 2020, Warehouse 13 had net credit sales of $850,000. On January 1, 2020, Allowance for Doubtful Accounts had a credit balance of $18,000. During 2020, $27,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivable basis). If the accounts receivable balance at December 31 was $160,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2020?

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