A newly created design business, Rhodes Art, is finishing its first year of operations
During the year, credit sales were $45,000 and collections of credit sales were $33,000. One account for $675 was written off. Smart Art uses the aging-of-receivables method to account for bad debts expense. It has estimated $200 as uncollectible at year-end. What is the amount of the Bad Debts Expense for the first year of operations?
A) $11,125
B) $675
C) $200
D) $875
D .Bad Debts Expense = $200 + $675 = $875
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