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 $ 355,000 debit Allowance for uncollectible accounts 500 debit Net Sales 800,000 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?

Respuesta :

Answer:

The amount that should be debited to Bad Debts Expense when the year-end adjusting entry is prepared is $4,800.

Explanation:

Bad debt expense to be debited for year end adjusting entry

= Credit sales * 0.6%

= $800,000*0.60%

= $4,800

Therefore, The amount that should be debited to Bad Debts Expense when the year-end adjusting entry is prepared is $4,800.