1. Baxter Ltd recorded sales of $420,000 during the year with $320,000 being on credit. Bad debts in the past have averaged 3% of credit sales and the company uses this information as the basis to estimate the provision for doubtful debts. The estimate of the provision for doubtful debts for the year is:

   	a.	$9,600
   	b.	$12,600
   	c.	nil.
   	d.	$3,000