Question 10

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Consider the following information regarding the company's history:

• Accounts Receivables total$950,000
• Estimates show that 4% of its receivables will be uncollectible
• No balance in the Allowance account

Using the allowance method, what is the correct amount of a company's bad debt expense for the year, given the above information?

• $42,750
• $36,480
• $39,520
• $38,000