Emerz Corporation Had Sales of $850,000,of Which 20% Were Cash $\begin{array}{lcc}\text { Bad Debts Expense } & 9,800 & \\\quad \text { Allowance for Uncollectible Accounts } & & 9,800 \\\end{array}$

Emerz Corporation had sales of $850,000,of which 20% were cash sales.As of year-end,the balance in the Allowance for Uncollectible Accounts before adjusting for bad debts was a $400 debit.The company estimates bad debts as 10% of ending accounts receivable or 1.5% of credit sales.What is the journal entry that Emerz Corporation will make if it estimates bad debts by using a percentage of credit sales?

A) $\begin{array}{lcc}\text { Bad Debts Expense } & 9,800 & \\\quad \text { Allowance for Uncollectible Accounts } & & 9,800 \\\end{array}$

B) $\begin{array}{lccc}\text { Bad Debts Expense } & 10,200 & \\\quad \text { Allowance for Uncollectible Accounts } && 10,200 \\\end{array}$

C) $\begin{array}{lccc}\text { Bad Debts Expense } & 10,600 & \\\quad \text { Allowance for Uncollectible Accounts } & & 10,600 \\\end{array}$

D) $\begin{array}{lccc}\text { Bad Debts Expense } & 12,350 & \\\quad \text { Allowance for Uncollectible Accounts } & & 12,350 \\\end{array}$

E) $\begin{array}{lccc}\text { Bad Debts Expense } & 12,750 & \\\quad \text { Allowance for Uncollectible Accounts } & & 12,750\end{array}$