A Company Used the Percent of Sales Method to Determine

Multiple Choice

A company used 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 0.5% of credit sales to be uncollectible.What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

A) $925
B) $1,225
C) $4,200
D) $4,500
E) $45,000