Answer:
B. $12,000,000
Explanation:
Hi there!
At the beginning of 2020 we estimate the credits that will be uncollectible and constitute the allowance for uncollectible.
<u>The journal entry:</u>
Debit Credit
Bad debts expense $15,000,000
Allowance for uncollectible account $15,000,000
During the year $88,000,000 was collected and part of the forecast must be reversed since it was overestimated (remember that it was estimated to collect $85,000,000 from the $ 100,000,000)
<u>The jorunal entry:</u>
Debit Credit
Allowance for uncollectible account $3,000,000
Bad debts expense $3,000,000
Allowance for uncollectible account ledger, December 31 2020
<h3>
<u>Allowance for uncollectible acc</u><u>ou</u>
<u>nt
</u></h3>
Debit Credit
$15,000,000
<u> $3,000,000 </u>
$12,000,000
