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	$ 300,000	debit
Net Sales	750,000	credit

All sales are made on credit. Based on past experience, the company estimates 0.6% of net sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Multiple Choice

• Debit Bad Debts Expense $1,800; credit Allowance for Doubtful Accounts $1,800.

• Debit Bad Debts Expense $2,300; credit Allowance for Doubtful Accounts $2,300.

• Debit Bad Debts Expense $4,000; credit Allowance for Doubtful Accounts $4,000.

• Debit Bad Debts Expense $4,500; credit Allowance for Doubtful Accounts $4,500.

• Debit Bad Debts Expense $5,000; credit Allowance for Doubtful Accounts $5,000.

Granite Company purchased a machine costing $132,890. Granite paid freight charges of $3,700. The machine requires special mounting and wiring connections costing $11,700. When installing the machine, $3,200 in damages occurred. Compute the cost recorded for this machine.

Multiple Choice

• $158,600.

• $132,890.

• $148,290.

• $148,490.

• $147,790.