The Current Credit Balance in Allowance for Doubtful Accounts Is

Multiple Choice

The current credit balance in allowance for doubtful accounts is $150. Management estimates that 2.5% of net credit sales of $105,000 will be uncollectible. Based on the foregoing data, what is the bad-debt expense balance on the income statement?

A) $2,775
B) $2,475
C) $2,650
D) $2,625