A Company Uses the Percent of Sales Method to Determine

Multiple Choice

A company uses the percent of sales 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 0.6% of credit sales to be uncollectible.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

A) Debit Bad Debts Expense $2,130; credit Allowance for Doubtful Accounts $2,130.
B) Debit Bad Debts Expense $2,630; credit Allowance for Doubtful Accounts $2,630.
C) Debit Bad Debts Expense $4,300; credit Allowance for Doubtful Accounts $4,300.
D) Debit Bad Debts Expense $4,800; credit Allowance for Doubtful Accounts $4,800.
E) Debit Bad Debts Expense $5,300; credit Allowance for Doubtful Accounts $5,300