Sanchez Inc If Sanchez Estimates Bad Debts at 5% of Net Credit

Multiple Choice

Sanchez Inc. sells to customers only on credit. For the year ended December 31, 2017, the following information is provided:
$\begin{array}{lrr} \text {Sales revenue } &\$850,000\\ \text {Accounts receivable, 1/01/17 } &230,000\\ \text { Allowance for doubtful accounts, \( 12 / 31 / 17 \) (before adjustment for bad debts) } &600\\ \text { Collections during 2017 } &470,000\\ \text { Accounts written off as uncollectible during 2017 } &13,000\\ \text {Sales returns } &7,000\\\end{array}$


If Sanchez estimates bad debts at 5% of net credit sales, how much is bad debt expense?

A) $34,000
B) $15,200
C) $23,400
D) $42,150