1. Question Content Area

   Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $400,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 4% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $1,400 before adjustment?

   a.

   Bad Debt Expense	13,600
   Allowance for Doubtful Accounts		13,600

   b.

   Bad Debt Expense	14,100
   Allowance for Doubtful Accounts		14,100

   c.

   Bad Debt Expense	14,600
   Allowance for Doubtful Accounts		14,600

   d.

   Bad Debt Expense	15,600
   Allowance for Doubtful Accounts		15,600