A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable$35,000debitAllowance for uncollectible accounts 500creditNet Sales 180,000creditAll sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
A. $1,500
B. $1,080
C. $1,775
D. $1,275
E. $2,500
Answer: B
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