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

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

A company uses 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 receivable	$	359,000	debit
Allowance for uncollectible accounts		540	debit
Net Sales		804,000	credit

All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

Multiple Choice

$4,824
$4,284
$2,694
$5,364
$1,614

business accounting

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Answer 1

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Answer #1

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A company	Amount $
Net Sales	804,000.00
Uncollectible %	0.60%
Allowance for uncollectible should be	4,824.00
Add: debit balance of Allowance for uncollectible	540.00
Bad Debts Expense for the year end	5,364.00

Answer is $ 5,364.

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Answer 2

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