One company used the Percent Sales Method to determine its Bad Debts Expense. At the...
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Accounting
One company used the Percent Sales Method to determine its Bad Debts Expense. At the end of 20XX, the company's unadjusted Trial Balance reported the following amounts: Accounts Receivable $ 355,000, Allowance for Doubtful Accounts $ 500 (credit) and Net Sales of $ 800,000. All sales are made on credit. Based on experience, the company estimates that 0.6% of credit sales are uncollectible. What amount should be debited to Bad Debts Expense when preparing the adjusting entry at the end of the year? Select one:
a. $ 4,800
b. $ 1,275
c. $ 1,775
d. $ 4,500
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