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 $ 383,000 debit Allowance for uncollectible accounts 580 credit Net Sales 880,000 credit All sales are made on credit. Based on past experience, the company estimates that 0.5% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared

Respuesta :

Answer:

$4,400

Explanation:

The computation of the bad expense amount debited is shown below:

Since in the question it is mentioned that the company estimated 0.5% of net credit sales that are considered to be uncollectible

So,

The amount of bad debt expense debited is

= $880,000 × 0.5%

= $4,400

Hence, the amount is $4,400 that should be debited to bad debt expense