Jumpin Corporation Uses the Percent-Of-Sales Method to Estimate Uncollectibles

Multiple Choice

Jumpin Corporation uses the percent-of-sales method to estimate uncollectibles.Net credit sales for the current year amount to $2,000,000,and management estimates 2% will be uncollectible.The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $1,000.The amount of Uncollectible-Account Expense reported on the income statement will be:

A) $1,000.
B) $39,000.
C) $40,000.
D) $41,000.