Question: Murrays Drug Supply uses the allowance method to account for bad debts. During 2010, the company recorded $425,000 in credit sales. At the end of

Murray’s Drug Supply uses the allowance method to account for bad debts. During 2010, the company recorded $425,000 in credit sales. At the end of 2010 but before adjustments, account balances were accounts receivable, $150,000 and allowance for uncollectible accounts, $(2,000).

If bad debt expense is estimated to be 2.0% of credit sales, how much bad debt expense will be on the year-end income statement?

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