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Please choose the correct answer and explain it. 9. The Wiggle Company uses the percentage of receivables method for recording bad debts expense. The accounts
Please choose the correct answer and explain it.
9. The Wiggle Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will the Wiggle Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? 10,000 a. Bad Debts Expense Allowance for Doubtful Accounts 10,000 b. Bad Debts Expense Allowance for Doubtful Accounts 8,000 8,000 8,000 c. Bad Debts Expense Accounts Receivable 8,000 10,000 d. Bad Debts Expense Accounts Receivable 10,000Step by Step Solution
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