BlaBla Inc. has the following balances before doing adjusting entries for the year ended 12/31/Year4. All sales were on credit. The allowance has a DEBIT (abnormal) balance.
Accounts Receivable $ 100,000 debit
Allowance for Uncollectible accounts (see above) $ 900 debit
Sales revenue $ 500,000 credit
Assume that BlaBla Inc. uses the percentage of credit sales method, and estimates that 1% of credit sales will prove to be uncollectible. What is bad debt expense on the income statement for the year ended 12/31/Year4?
a. 6,000 debit
b. 5,000 debit
c. 4,100 debit
d. 5,900 debit