Over the Past Five Years,a Company Had Average Annual Credit

Multiple Choice

Over the past five years,a company had average annual credit sales of $320,000 and this year had write-offs of $2,000.Credit sales in the current year are $300,000.The balance in the Allowance for Doubtful Accounts is a $500 credit.Using the percentage of credit sales method and an estimate of 1%,what amount should the company record as an estimate of bad debt expense?

A) $2,500
B) $3,000
C) $2,980
D) $3,200