The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense reports the following selected amounts: Accounts receivable $ 438,000 Debit Allowance for Doubtful Accounts 1,280 Credit Net Sales 2,130,000 Credit All sales are made on credit. Based on past experience, the company estimates 2.0% of ending account receivable to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

Bad debt expense A/c Dr $7,480

To Allowance for doubtful A/c $7,480

Explanation:

According to the scenario, the given data are as follows:

Accounts receivable = $438,000 debit

Allowance for doubtful Accounts = $1,280 credit

Net sales = $2,130,000 credit

Uncollectible percentage = 2%

So, Uncollectible amount = $438,000 × 2% = $8,760

As Allowance for doubtful accounts is in credit, so, it get subtracted.

So, Bad debt expense = $8,760 - $1,280 = $7,480

So, The adjusting entry are as follows:

Bad debt expense A/c Dr $7,480

To Allowance for doubtful A/c $7,480

(Being the bad debt expense is recorded)

answer(d) all of the choices are correct;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.