The Allowance for Doubtful Debts Currently Has a Credit Balance

question 122

Multiple Choice

The Allowance for doubtful debts currently has a credit balance of $200. The company's management estimates that 2.5% of net credit sales will be uncollectable. Net credit sales are $115 000. What will be the amount of Bad debts expense reported on the income statement?

• A)$2 875
• B)$3 075
• C)$2 675
• D)$3 275

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