Question
During December, McComb Co. had net credit sales of $1,000,000. On December 1, 2017, the Allowance for Doubtful Accounts had a debit balance of $2,000.
During December, McComb Co. had net credit sales of $1,000,000. On December 1, 2017, the Allowance for Doubtful Accounts had a debit balance of $2,000. Experience indicates that the ending balance in the allowance for doubtful accounts should be 5% of net credit sales (percentage-of-sales basis). If the accounts receivable balance at December 31 was $100,000, what amount should be reported as bad debt expense for the year?
| $48,000 | ||
| $50,000 | ||
| $2,000 | ||
| $52,000 |
During December, McComb Co. had net credit sales of $1,000,000. On December 1, 2017, the Allowance for Doubtful Accounts had a debit balance of $2,000. Experience indicates that the ending balance in the allowance for doubtful accounts should be 5% of net credit sales (percentage-of-sales basis). If the accounts receivable balance at December 31 was $100,000, what amount should be reported as bad debt expense for the year?
| $48,000 | ||
| $50,000 | ||
| $2,000 | ||
| $52,000 |
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