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Windsor, Inc. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance...

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Accounting

Windsor, Inc. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $260000 and credit sales are $1040000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Windsor, Inc. make if the Allowance for Doubtful Accounts has a credit balance of $2600 before adjustment?

A. Bad Debt Expense 15600

Allowance for Doubtful Accounts 15600

B. Bad Debt Expense 5200

Allowance for Doubtful Accounts 5200

C. Bad Debt Expense 10400

Allowance for Doubtful Accounts 10400

D. Bad Debt Expense 7800

Allowance for Doubtful Accounts 7800

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