Tanning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that 5% will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Bad Debts account has a credit balance of $2,000 before the adjustment?
A) Bad Debts Expense 13,000Allowance for Bad Debts 13,000
B) Bad Debts Expense 15,000Allowance for Bad Debts 15,000
C) Bad Debts Expense 13,000Accounts receivable 13,000
D) Bad Debts Expense 15,000Accounts receivable 15,000
A
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Answer the following statement true (T) or false (F)