Wesson Company uses the allowance method to record its expected credit losses. It estimates its losses at
Question:
Wesson Company uses the allowance method to record its expected credit losses. It estimates its losses at one percent of credit sales, which were \(\$ 750,000\) during the year. The Accounts Receivable balance was \(\$ 220,000\) and the Allowance for Doubtful Accounts had a credit balance of \(\$ 1,000\) at year-end. What amount is the debit to the Bad Debts Expense?
a. \(\$ 7,500\)
b. \(\$ 8,500\)
c. \(\$ 6,500\)
d. \(\$ 3,200\)
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