Question

Blossom Inc. has an unadjusted debit balance of $3,500 in its Allowance for Doubtful Accounts. The company has experienced bad debt losses of 2% of credit sales in prior periods. Blossom reported net credit sales of $1,500,000 for the current period. The required journal entry to record Bad Debt Expense should include a debit to:

A) Allowance for Doubtful Accounts for $30,000.

B) Allowance for Doubtful Accounts for $33,500.

C) Bad Debt Expense for $33,500.

D) Bad Debt Expense for $30,000.

Answer

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