A Company Has $90,000 in Outstanding Accounts Receivable and It

question 49

Multiple Choice

A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts.Experience suggests that 4% of outstanding receivables are uncollectible.The current balance (before adjustments) in the allowance for doubtful accounts is an $800 debit.The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

• A)$3,600
• B)$3,568
• C)$3,632
• D)$2,800
• E)$4,400