At the beginning of 2015, Peter Dots has the following ledger balances: During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000 and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts would be:
A)$5,000.
B)$6,500.
C)$6,400.
D)$7,000.

Question

At the beginning of 2015, Peter Dots has the following ledger balances:  During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000 and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts would be:
A)$5,000. 
B)$6,500. 
C)$6,400. 
D)$7,000.

Quizplus · Accepted Answer

The Answer of At the beginning of 2015, Peter Dots has the following ledger balances:  During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000 and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts would be:
A)$5,000. 
B)$6,500. 
C)$6,400. 
D)$7,000.

At the Beginning of 2015, Peter Dots Has the Following