During the year, Bernard Company had net credit sales of $45,000. At the end of the year, before adjusting entries, the balance in Accounts Receivable was $12,500 (debit) and the balance in Allowance for Bad Debts was $650 (credit). If the company uses an income statement approach to estimate bad debts at 5%, what is the ending balance in the Allowance for Bad Debts account? a. $1,275 b. $1,600 c. $2,250 d. $2,900

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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During the year, Bernard Company had net credit sales of $45,000. At the end of the year, before adjusting entries, the balance in Accounts Receivable was $12,500 (debit) and the balance in Allowance for Bad Debts was $650 (credit). If the company uses an income statement approach to estimate bad debts at 5%, what is the ending balance in the Allowance for Bad Debts account?

a. $1,275

b. $1,600

c. $2,250

d. $2,900

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