Question
Samson Corporation had sales of $1,000,000 during 2006, of which 80 percent were on credit. On December 31, 2006, Accounts Receivable totaled $80,000 and Allowance
Samson Corporation had sales of $1,000,000 during 2006, of which 80 percent were on credit. On December 31, 2006, Accounts Receivable totaled $80,000 and Allowance for Bad Debts had a debit balance of $1,200. Given this information, if uncollectible receivables are estimated to be 3 percent of accounts receivable, the adjusting entry as of December 31, 2006, to account for bad debts would include a
a. | Debit to Bad Debt Expense of $1,200 |
b. | Debit to Bad Debt Expense of $2,400 |
c. | Debit to Bad Debt Expense of $3,600 |
d. | Credit to Allowance for Bad Debts of $2,400 |
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