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Kelton Inc. reported net credit sales of $370,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $675. The

Kelton Inc. reported net credit sales of $370,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $675. The company has experienced bad debt losses of 2% of credit sales in prior periods. Using the percentage of credit sales method, what amount should the company record as an estimate of Bad Debt Expense?

Multiple Choice

  • $2,700

  • $8,075

  • $2,025

  • $7,400

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