Bradford Plumbing had the following data for a recent year:

Credit sales .....................$289,000

Allowance for doubtful accounts, 1/1 (a credit balance) ... 4,120

Accounts receivable, 1/1 ................ 38,700

Collections on account receivable ............ 291,000

Accounts receivable written off ............. 4,620

Bradford estimates that 2.2 percent of credit sales will eventually default.

Required:

1. Compute bad debt expense for the year.

2. Determine the ending balances in accounts receivable and allowance for doubtful accounts.