A Company Uses the Percent of Receivables Method to Determine

Multiple Choice

A company uses the percent of receivables 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: All sales are made on credit.Based on past experience,the company estimates that 6% of receivables are uncollectible.What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

A) $22,500
B) $23,000
C) $22,000
D) $4,800
E) $5,500