A company uses the percent of receivables 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: All sales are made on credit.Based on past experience,the company estimates that 6% of receivables are uncollectible.What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
A)$22,500
B)$23,000
C)$22,000
D)$4,800
E)$5,500

Question

A company uses the percent of receivables 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:  All sales are made on credit.Based on past experience,the company estimates that 6% of receivables are uncollectible.What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
A)$22,500 
B)$23,000 
C)$22,000 
D)$4,800 
E)$5,500

Quizplus · Accepted Answer

The Answer of A company uses the percent of receivables 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:  All sales are made on credit.Based on past experience,the company estimates that 6% of receivables are uncollectible.What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
A)$22,500 
B)$23,000 
C)$22,000 
D)$4,800 
E)$5,500

A Company Uses the Percent of Receivables Method to Determine