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Financial Accounting

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Bad Debt Expense Allowance for Doubtful Accounts Credit Balance

FINACT-S6JKJV

Jazz Company has a \$200 credit balance at 12/31/17 in the Allowance for Doubtful Accounts before year-end adjusting entries have been made. After analyzing the Accounts Receivable account, it has been determined that two customers have account balances that will more than likely be uncollectible​ because they are more than 180 days past due. Smith and Associates owes Jazz Company \$2,000 on an invoice dated 5/31/17, and Brown Corporation owes \$1,800 related to an invoice dated 1/20/17.

How much Bad Debt Expense will need to be recorded in an adjusting entry at year-end if Jazz Company uses the Balance Sheet method to estimate bad debts?

A

\$3,600

B

\$3,800

C

\$3,400

D

\$4,000