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What amount will be reported as bad debts expense

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Reference no: EM132789962

The data presented below are for Mellon Corporation for the year ended December 31, 2017:

Sales (100% on credit) $1,500,000

Sales returns $60,000

Accounts receivable (December 31, 2017) $250,000

Allowance for doubtful accounts (credit balance) $3,000

(before adjustment at December 31, 2017)

Estimated amount of uncollectible accounts based on an aging analysis $31,000

Problem 1: If Mellon estimates its bad debts at 2% of net credit sales, what amount will be reported as bad debts expense for 2017?

a.$30,000

b.$27,000

c.$25,800

d.$28,800

Reference no: EM132789962

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