In its first year of business, ABC, Inc. had Accounts Receivable of $8,000 and Credit sales of $38,000. Management estimates 2% of the total credit sales will be uncollectible. Bad Debt Expense equals:.

$760

Explanation:

Account Receivable = $8,000

Total Credit sales = $38,000

As management estimates 2% of the total credit sales will be uncollectible the debt expense will be

Debt Expense = Credit Sales x 2%

Debt Expense = $38,000 x 2%

Debt Expense = $760

The Journal Entry will be as follow

DR.   Bad debt Expense         $760

CR.   Account receivable  $760

It is assumed that the expense is directly charged to income statement there is no adjustment to provision for doubtful debt account.

you have to put the parentheses like this:

in fact, you have to perform the operation inside parentheses first, and then proceed in order:

answer; post closing trial balance;