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Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and sales...

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Accounting

Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and sales on credit during the year of $24 million. There is also a credit balance of $16,000 in the allowance for doubtful accounts. If the company estimates that 2% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year?

a. $372,000.

b. $ 114,000.

c. $ 146,000.

d. $ 130,000.

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