At the beginning of 2017,Brady,Inc.has the following account balances:
Accounts Receivable $45,000 (Debit)
Allowance for Bad Debts $5,000 (Credit)
Bad Debts Expense $0
During the year,credit sales amounted to $810,000.Cash collected on credit sales amounted to $780,000,and $16,000 has been written off.At the end of the year,the company adjusted for bad debts expense using the percent-of-sales method and applied a rate,based on past history,of 3.5%.The amount of bad debts expense for 2017 is ________.

Question

Quizplus · Accepted Answer

To find the amount of bad debts expense for 2017 using the percent-of-sales method, we need to multiply the credit sales for the year by the bad debts rate.

Credit sales for the year = $810,000

Bad debts rate = 3.5% = 0.035

Bad debts expense = $810,000 x 0.035 = $28,350

Therefore, the answer is A) $28,350.

At the Beginning of 2017,Brady,Inc