Deuce Company Uses the Allowance Method to Estimate Losses from Uncollectible

question 54

Multiple Choice

Deuce Company uses the allowance method to estimate losses from uncollectible receivables. Net sales for the year are $120,000, and the company estimates its bad debts as 1 percent of net sales. If there is already a $1,200 debit balance in Allowance for Bad Debts, how much should be recorded as Bad Debt Expense?

• A) $1,200
• B) $2,400
• C) $24,000
• D) No entry is required

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