Cary IncReported Net Credit Sales of $300,000 for the Current Year

question 164

Multiple Choice

Cary Inc.reported net credit sales of $300,000 for the current year.The unadjusted credit balance in its Allowance for Doubtful Accounts is $500.The company has experienced bad debt losses of 1% of credit sales in prior periods.Using the percentage of credit sales method,what amount should the company record as an estimate of Bad Debt Expense?

• A) $2,500
• B) $3,000
• C) $2,980
• D) $3,200

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