Libre,IncHas Experienced Bad Debt Losses of 4% of Credit Sales

Multiple Choice

Libre,Inc.has experienced bad debt losses of 4% of credit sales in prior periods.At the end of the year,the balance of Accounts Receivable is $100,000 and the Allowance for Doubtful Accounts has an unadjusted credit balance of $500.Net credit sales during the year were $150,000.Using the percentage of credit sales method,what is the estimated Bad Debt Expense for the year?

A) $4,000
B) $5,600
C) $6,000
D) $6,400