Wellington Corp

Multiple Choice

Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and sales on credit during the year of $24 million. There is also a credit balance of $12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year?

A) $ 532,000.
B) $ 520,000.
C) $1,920,000.
D) $ 508,000.