Niagara Art Is a New Business

Niagara Art is a new business.During its first year of operations,credit sales were $41,000 and collections of credit sales were $37,000.One account,$700,was written off.Management uses the percent-of-sales method to account for bad debts expense and estimates 2% of credit sales to be uncollectible.Bad debts expense for the first year of operations is ________.

A) $120
B) $820
C) $700
D) $1,560