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Bay Company began using the allowance method in 2014. On January 1, 2014, Bay had...

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Accounting

Bay Company began using the allowance method in 2014. On January 1, 2014, Bay had a $3,500 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During 2014, Bay provided $30,000 of service on account. The company collected $23,500 cash from account receivable. Uncollectible accounts are estimated to be 2% of sales on account.

The amount of uncollectible accounts expense to recognize on the 2014 income statement is:

600

300

130

70

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