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Amount of the bad debt

Felix Company has a $140,000 balance in Accounts Receivable and a $1,000 debit balance in Allowance for Doubtful Accounts. Credit sales for the period totaled $900,000. What is the amount of the bad debt adjusting entry if Felix uses a percentage of receivables basis (at 10%)?
a. $15,000
b. $14,000
c. $16,000
d. $15,200

Solution Summary

The solution explains how to determine the amount of the bad debt under the percentage of receivables method