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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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