Uses the percentage of credit sales method

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Reference no: EM131203704

BlaBla Inc. has the following balances before doing adjusting entries for the year ended 12/31/Year4. All sales were on credit. The allowance has a DEBIT (abnormal) balance.

Accounts Receivable $ 100,000 debit

Allowance for Uncollectible accounts (see above) $ 900 debit

Sales revenue $ 500,000 credit

Assume that BlaBla Inc. uses the percentage of credit sales method, and estimates that 1% of credit sales will prove to be uncollectible. What is bad debt expense on the income statement for the year ended 12/31/Year4?

a. 6,000 debit

b. 5,000 debit

c. 4,100 debit

d. 5,900 debit

Reference no: EM131203704

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