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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 companys unadjusted trial balance reported the following selected amounts:

Accounts receivable                                   $241,000 debit 

Allowance for uncollectible accounts              700 credit 

Net Sales                                                  880,000 credits 

All sales are made on credit. Based on past experience, the company estimates 0.30% of credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

A.            $3340

B.            $2640

C.            $723

D.            $1940

E.            $2705

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