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Question
Abbott Company uses the allowance method of accounting for uncollectible receivables. Abbott estimates that 3% of credit sales will be uncollectible. On January 1, Allowance for Doubtful Accounts had a credit balance of $2,400. During the year, Abbott wrote off accounts receivable totaling $1,800 and made credit sales of $100,000. There were no sales returns during the year. After the adjusting entry, the December 31 balance in Bad Debt Expense will be
a. $1,200
b. $3,000
c. $3,600
d. $7,200
Answer
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