On Average,5% of Credit Sales Has Been Uncollectible in the Past.At

Multiple Choice

On average,5% of credit sales has been uncollectible in the past.At the end of the year,the balance of accounts receivable is $100,000 and the allowance for doubtful accounts has a credit balance of $500.Net credit sales during the year were $150,000.Using the percentage of credit sales method,the estimated bad debt expense would be:

A) $5,000.
B) $7,000.
C) $7,500.
D) Cannot be determined; the percent of credit sales method cannot be used, as the information provided can only be used for calculating the aging of accounts receivable method.