In 2011, Seven Seas sold $20,000 worth of merchandise on account. Its accountant estimated that $400 of that amount would be uncollectible. In 2011, Saki, a Japanese customer, purchased $500 of merchandise on account from Seven Seas

In 2012, Saki declared bankruptcy while still owing the $500. What is the amount of bad debts expense Seven Seas should report on
December 31, 2011?
A) $100
B) $400
C) $500
D) $900

B