The following information pertains to Lindsey Corp.at the end of the year:
Lindsey Corp.uses the percentage-of-credit-sales method and estimates that 2% of the credit sales are uncollectible.After the year-end adjustment,what amount of bad debt expense would Lindsey report for the year?

Question

Quizplus · Accepted Answer

The bad debt expense would be estimated as 2% of credit sales. Since the credit sales amount is not provided, we cannot determine the exact amount of bad debt expense. However, if we are given the total credit sales for the year, we can calculate the bad debt expense using the estimated percentage of 2%. Therefore, based on the given information, we can only choose the closest option, which is C, $3,000.

The Following Information Pertains to Lindsey Corp