As of December 31, 2013, Amy Jo's Appliances had unadjusted account balances in accounts receivable of $311,000 and $970 in the allowance for uncollectible accounts, following 2013 write-offs of $6,450 in bad debts. An analysis of Amy Jo's December 31, 2013, accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for 2013 should be:
A) $6,220.
B) $6,450.
C) $5,250.
D) None of the above is correct.
Correct Answer:
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