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Question(s) / Instruction(s):

A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company\'s unadjusted trial balance reported the following selected amounts:

  Accounts receivable     $ 360,000 debit 

  Allowance for uncollectible accounts            750 debit 

  Net Sales           830,000 credits 

All sales are made on credit. Based on past experience, the company estimates 0.3% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

a)            Bad Debt Expense           3600      

  Allowance for Doubtful Accounts                          3600

b)            Bad Debt Expense           2490      

  Allowance for Doubtful Accounts                          2490

c)            Bad Debt Expense           3240      

  Allowance for Doubtful Accounts                          3240

d)            Bad Debt Expense           750        

    Allowance for Doubtful Accounts                        750

e)            Bad Debt Expense           1080      

Allowance for Doubtful Accounts                            1080

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