For 2018, Rahal's Auto Parts Estimates Bad Debt Expense at 1

For 2018, Rahal's Auto Parts estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an allowance for uncollectible accounts of $86,500 and $2,100, respectively, at December 31, 2017. During 2018, Rahal's credit sales and collections were $404,000 and $408,000, respectively, and $2,340 in accounts receivable were written off.
- Rahal's final balance in its allowance for uncollectible accounts at December 31, 2018, is:

A) $4,340.
B) $4,100.
C) $3,800.
D) $4,040.

Correct Answer:

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