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	$	359,000	debit
Allowance for uncollectible accounts		540	debit
Net Sales		804,000	credit

All sales are made on credit. Based on past experience, the company estimates that 0.6% 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

• $4,824

• $4,284

• $2,694

• $5,364

• $1,614