Modern Designs Is a New Business

Multiple Choice

Modern Designs is a new business.During its first year of operations,credit sales were $43,000 and collections of credit sales were $34,000.One account,$625,was written off.Management uses the percent-of-sales method to account for bad debts expense and estimates 3% of credit sales to be uncollectible.Bad debts expense for the first year of operations is ________.

A) $665
B) $1290
C) $625
D) $2310