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In the percent of sales method

04/10/2021 Client: muhammad11 Deadline: 2 Day

A company uses 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:

Accounts receivable $ 359,000 debit
Allowance for uncollectible accounts 540 debit
Net Sales 804,000 credit

All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

Multiple Choice

$4,824

$4,284

$2,694

$5,364

$1,614

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