Q3Joe's Auto Repair estimates that approximately 3% of net credit sales are uncollectible. Joe's calculates Bad Debts Expense using the:

		direct write-off method.
		income statement method.
		gross method.
		balance sheet method

Q4Gross Accounts Receivable is $20,000. Allowance for Doubtful Accounts has a credit balance of $400. Net credit sales for the year are $125,000. In the past, 2% of credit sales had proved uncollectible, and an aging of the receivables indicates $1,500 is doubtful. Under the income statement approach, Bad Debts Expense for the year is:

		$1,900.
		$2,900
		$2,500.
		$1,100.