1. A company uses 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:

Accounts receivable	$	365,000	debit
Allowance for uncollectible accounts		600	debit
Net Sales		810,000	credit

All sales are made on credit. Based on past experience, the company estimates that 0.4% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

Multiple Choice

• $2,640

• $2,060

• $3,840

• $3,240

• $860