The Allowance for Bad Debts Account Has a Credit Balance

question 164

Multiple Choice

The Allowance for Bad Debts account has a credit balance of $4000 before the adjusting entry for bad debts expense.The company's management estimates that 5% of net credit sales will be uncollectible for the year 2019.Net credit sales for the year amounted to $280,000.What is the amount of Bad Debts Expense reported on the income statement for 2019?

• A) $14,000
• B) $18,000
• C) $7000
• D) $10,000

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