The following information is from the 2025 records of R & S Commercial Plumbing Company: Accounts receivable, December 31, 2025 $42,000 (debit) Allowance for Bad Debts, December 31, 2025 prior to adjustment 1,500 (debit) Net credit sales for 2025 180,000 Accounts written off as uncollectible during 2025 18,000 Cash sales during 2025 28,000 Bad debts expense is estimated by the percent−of−sales method. Management estimates that 4% of net credit sales will be uncollectible. Calculate the amount of bad debts expense for 2025. A. $5,520 B. $5,700 C. $7,200 D. $8,320
The following information is from the 2025 records of R & S Commercial Plumbing Company: Accounts receivable, December 31, 2025 $42,000 (debit) Allowance for Bad Debts, December 31, 2025 prior to adjustment 1,500 (debit) Net credit sales for 2025 180,000 Accounts written off as uncollectible during 2025 18,000 Cash sales during 2025 28,000 Bad debts expense is estimated by the percent−of−sales method. Management estimates that 4% of net credit sales will be uncollectible. Calculate the amount of bad debts expense for 2025. A. $5,520 B. $5,700 C. $7,200 D. $8,320
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information is from the 2025 records of R & S Commercial Plumbing Company:
|
Accounts receivable, December 31, 2025
|
$42,000
(debit) |
|
Allowance for Bad Debts, December 31, 2025
prior to adjustment
|
1,500
(debit) |
|
Net credit sales for 2025
|
180,000
|
|
Accounts written off as uncollectible during 2025
|
18,000
|
|
Cash sales during 2025
|
28,000
|
percent−of−sales
method. Management estimates that
4%
of net credit sales will be uncollectible. Calculate the amount of bad debts expense for 2025.$5,520
$5,700
$7,200
$8,320
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