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Kelton Inc. reported net credit sales of $450,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $750. The company has experienced bad debt losses of 1% of
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Kelton Inc. reported net credit sales of $450,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $750. The company has experienced bad debt losses of 1% of credit sales in prior periods. Using the percentage of credit sales method, what amount should the company record as an estimate of Bad Debt Expense?a. $3,750b. $4,500c. $4,470d. $4,800

User Eoin Campbell
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1 Answer

3 votes

Answer:

Option B is correct one.

$4500

Step-by-step explanation:

Bad Debt Expense = Net credit sales × Bad debt loss rate

= $450,000 × 0.01

= $4,500

User Galfisher
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