Colley Company uses the allowance method for bad debts and has the following information before the year end adjusting entry: Accounts Receivable $120,000 Allowance for Doubtful Accounts $500 Sales $800,000 18. If the company used the percentage of sale method and estimates bad debts to be 2% of sales what is the amount of bad debt expense: A) 2,400 B) 16,000 C) 16,500 D) 15,500 19. If the company uses the percentage of accounts receivable method and estimates 4% of accounts receivable will be uncollectible, what is the bad debt expense? A) 4,300 B) 4,800 C) 32,000 D) 5,300
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