Question

Cary Inc. reported net credit sales of $350,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $625. The company has experienced bad debt losses of 3% of credit sales in prior periods. Using the percentage of credit sales method, what amount should the company record as an estimate of Bad Debt Expense?

a) $2,500

b) $11,125

c) $10,500

d) $1,875

Cary Inc. reported net credit sales of $350,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $625. The company has experienced bad debt losses of 3% of credit sales in prior periods. Using the percentage of credit sales method, what amount should the company record as an estimate of Bad Debt Expense?