Creek Co. uses the percentage of credit sales method in determining its bad debt expense. The following information comes from the accounting records of Creek Co:
Cash sales $250,000
Credit sales 750,000
Total sales 1,000,000
Credit balance in the Allowance for Doubtful Accounts 2,000
Bad debt loss rate 3%
What is the estimate of bad debt expense?
a. $30,000.
b. $22.500.
c. $28,000.
d. $24,500.
