Milford Company uses the percent-of-sales method to estimate uncollectibles. Netcredit sales for the current year amount to $140,000, and management estimates 2% will beuncollectible. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $3,000. The amount of expense to report on the income statement will bea. $1,500.b. $2,800.c. $8,400.d. $5,800.

Question

Milford Company uses the percent-of-sales method to estimate uncollectibles. Net
credit sales for the current year amount to $140,000, and management estimates 2% will be
uncollectible. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $3,000. The amount of expense to report on the income statement will be
a. $1,500.
b. $2,800.
c. $8,400.
d. $5,800.

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