The following information pertains to Lightning Inc., at the end of the year:

Credit Sales $ 60,000

Accounts Payable 10,000

Accounts Receivable 7,000

Allowance for Uncollectible Accounts 400 credit

Cash Sales 20,000

Lightning uses the percentage-of-credit-sales method and estimates 1% of sales are uncollectible. What is the ending balance of the allowance account after the year-end adjustment?

A) $600.

B) $1,000.

C) $200.

D) $1,200.

Answer: $1,000.