Temper Company has credit sales of $3.10 million for year 2010. Temper estimates that 2% of accounts receivable will remain uncollectible. Historically, .9% of sales have been uncollectible. On December 31, 2010, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $2,575. Temper prepares a schedule of its December 31, 2010, accounts receivable by age. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here:

Assuming the company uses the percent of accounts receivable method, what is the amount that Temper will enter as the Bad Debt Expense in the December 31 adjusting journal entry?

Select one:

a. $18,947.20

b. $16,372.20

c. $23,024.40

d. $27,900.00

e. $21,522.20

December 31, 2010 Accounts Receivable $620,000 248.000 49,600 24,800 4960 Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due Expected Percent Uncollectible 1.05% 180 6.30 31.75 6600