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San Mateo Company had the following account balances at December 31,2021, before recording bad...

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Accounting

San Mateo Company had the following account balances at December 31,2021, before
recording bad debt expense for the year:
Accounts receivable $ 1,400,000
Allowance for uncollectible accounts (credit balance)22,000
Credit sales for 20211,950,000
San Mateo is considering the following approaches for estimating bad debts for 2021:
Based on 3% of credit sales
Based on 6% of year-end accounts receivable
What amount should San Mateo charge to bad debt expense at the end of 2021 under
each method?
Percentage of credit sales Percentage of accounts receivable
a. $ 36,500 $ 62,000
b. $ 58,500 $ 62,000
c. $ 58,500 $ 84,000
d. $ 117,000 $ 95,000
A) Option A
B) Option B
C) Option C
D) Option D

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