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What amount should be debited to Bad Debts Expense

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Question - 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 $35,000 debit

Allowance for uncollectible accounts $500 credit

Net Sales $180,000 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?

A. $1,275

B. $1,775

C. $1,500

D. $1,080

E. $2,500

Reference no: EM132934926

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