Munich Company's total sales for the year amounted to $100,000, of which 60 percent was on credit. The unadjusted trial balance showed accounts receivable of $20,000, and the allowance for doubtful accounts reflected a $800 credit balance (before the write-off of a bad account of $500). Munich uses 3% of accounts receivable as an estimate of bad-debt expense. Calculate the bad-debt expense for the year for Munich Company.

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The Answer of Munich Company's total sales for the year amounted to $100,000, of which 60 percent was on credit. The unadjusted trial balance showed accounts receivable of $20,000, and the allowance for doubtful accounts reflected a $800 credit balance (before the write-off of a bad account of $500). Munich uses 3% of accounts receivable as an estimate of bad-debt expense. Calculate the bad-debt expense for the year for Munich Company.

Munich Company's Total Sales for the Year Amounted to $100,000