Refer to Q5-45. The balance of Allowance for Uncollectible Accounts, after adjustment, will be

a. $5,200.

b. $5,800.

c. $1,500.

d. $2,800.

Data from  Q5-45

Milford Company uses the percent-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to $140,000, and management estimates 2% will be uncollectible. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $3,000. The amount of expense to report on the income statement will be

a. $1,500.

b. $2,800.

c. $8,400.

d. $5,800.