Net Accounts Receivable: Allowance for Doubtful Accounts

7. Receivables and Investments / Net Accounts Receivable: Allowance for Doubtful Accounts / Problem 4

Problem 4

A company uses the percentage of sales method and estimates 3% of its \$400,000 credit sales will be uncollectible. What is the bad debt expense?

\$12,000

\$1,200

\$40,000

\$120,000