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Business, 18.04.2021 02:10 moowalden1239

Lani Co. uses the allowance method to account for bad debts. At the end of the year, their unadjusted trial balance shows an accounts receivable balance of $400,000; allowance for doubtful accounts balance of $400 (debit); and sales of $1,200,000. Based on history, Lani estimates that bad debts will be 1% of accounts receivable. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of: A. $3,600
B. $4,000
C. $11,600
D. $12,400
E. $12,000
F. $4,400

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