A Company Uses the Percentage of Credit Sales Method to Estimate

question 73

Multiple Choice

A company uses the percentage of credit sales method to estimate bad debt expense. At the end of the year, the company's unadjusted trial balance includes the following: The company estimates, based on historical bad debt losses, that 0.5% of the sales will be uncollectible. What is the bad debt expense to be recorded for the year?

• A) $4,500
• B) $4,300
• C) $4,700
• D) $5,000

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