The Allowance for Bad Debts account has a credit balance of $4000 before the adjusting entry for bad debts expense. The company's management estimates that 5% of net credit sales will be uncollectible for the year 2019. Net credit sales for the year amounted to $280,000. What is the amount of Bad Debts Expense reported on the income statement for 2019?
A) $14,000
B) $18,000
C) $7000
D) $10,000
A) $14,000
Explanation: $280,000 × 0.05 = $14,000
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