On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $95,250; Allowance for Doubtful Accounts, credit balance of $921. What amount should be debited to Bad Debts Expense, assuming 6% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible?

A. $5,715.

B. $6,636.

C.$4,794.

D. $5,770.

E. $5,660.

amount debited to bad debt expenses = $4794

so correct option is C.$4,794

Explanation:

given data

Outstanding account receivable = 95250

credit balance of allowance for doubtful account = 921

rate = 6 %

solution

we get here Allowance for doubtful accounts that is

Allowance for doubtful accounts = 6 % of 95250

Allowance for doubtful accounts = 5715

and

so here amount should be debited to bad debt expenses is

amount debited to bad debt expenses = 5715 - 921

amount debited to bad debt expenses = $4794

so correct option is C.$4,794