A company used the percent of sales method to determine its bad debts expense. A

Question

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 recelvable Allowance for uncollectible accounts Net sales 335,000 debit 400 credit 200,000 credit All sales are made on credit Based on past experience, the company estimates 0.5% of credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared? O $1.275 o $6,000 O s60,000 o $3,000 o $1,675

Explanation / Answer

Answer: $6000

Net sales $1200000

Uncollectible 0.5%

Bad debts expense $6000 ($1200000 * 0.5%).

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.