Flora and Fauna Company estimates its doubtful accounts by aging its accounts receivable and applying percentages to various aged categories of accounts . The Flora and Fauna Company computes a total of $7 200 in estimated doubtful accounts as of December : 31 2016 . Its Accounts Receivable account has a balance of $225 , 600 and its Allowance for Doubtful Accounts has a credit balance of $1 200 before adjustment at December 31 2016 How much bad debts expense will Flora and Fauna report in 2016 ? A ) $ 960 B ) $7 680 C ) $6 000 D ) $6 720