At the end of the accounting period, before adjusting the accounts, Zap Company presents the following information: Accounts Receivable, $35,000; Allowance for Uncollectible Accounts, $600 (debit balance); Sales, $400,000.

REQUIRED: Zap Companys credit losses are based on an analysis of accounts receivable, and $4,000 is estimated to be uncollectible. Encirle the one letter representing the correct adjusting entry:

Dr. Cr.

a. Bad Debts Expense 4,000

Accounts Receivable 4,000

b. Bad Debts Expense 3,400

Allowance for Uncollectible Accounts 3,400

c. Bad Debts Expense 4,600

Allowance for Uncollectible Accounts 4,600

d. Bad Debts Expense 4,000

Allowance for Uncollectible Accounts 4,000

e. None of these