Bay Company began using the allowance method in 2014. On January 1, 2014, Bay had a $3,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During 2014, Bay provided $25,000 of service on account. The company collected $21,000 cash from account receivable. Uncollectible accounts are estimated to be 2% of sales on account. The net realizable value of Bay's accounts receivable as of December 31, 2014 was

Select one:

A. $7,000

B. $3,500.

C.

$6,500.

D. $500