A&B FoodsData for the year ended December 31 are presented below.
Sales (100% on credit)$2,100,000
Sales returns150,000
Accounts Receivable (December 31)420,000
Allowance for Doubtful Accounts (Before adjustment at December 31)25,000
Estimated amount of uncollected accounts based on an aging analysis75,000
Refer to A&B Foods. If the company estimates its bad debts at 4% of net credit sales, what amount will be reported as bad debt expense?
A. $50,000
B. $75,000
C. $78,000
D. $84,000
Answer: C
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