Darby Uses the Allowance Method to Account for Uncollectible Accounts

question 154

Multiple Choice

Darby uses the allowance method to account for uncollectible accounts.Its year-end unadjusted trial balance shows Accounts Receivable of $104,500,allowance for doubtful accounts of $665 (credit) and sales of $925,000.If uncollectible accounts are estimated to be .5% of sales,what is the amount of the bad debts expense adjusting entry?

• A)$4,625
• B)$3,960
• C)$5,290
• D)$4,750
• E)$4,825

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