A Company Used the Percent of Sales Method to Determine

question 12

Multiple Choice

A company used the percent of sales method to determine its bad debts expense.At the end of the current year,the company's unadjusted trial balance reported the following selected amounts: All sales are made on credit.Based on past experience,the company estimates 0.5% of credit sales to be uncollectible.What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

• A)$925
• B)$1,225
• C)$4,200
• D)$4,500
• E)$45,000

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