Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is...
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Accounting
Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $320,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 8% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,600 before adjustment?
Select the correct answer.
A Bad Debt Expense$22,500 Accounts Receivable$22,500
B Bad Debt Expense$23,000 Allowance for Doubtful Accounts$23,000
C Bad Debt Expense$24,000 Allowance for Doubtful Accounts$24,000
D Bad Debt Expense$22,000 Accounts Receivable$22,000
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