Malik Ltd.(ML) uses allowance method to estimate the bad debt expense. At June 30, 20A1 , ML

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Malik Ltd.(ML) uses allowance method to estimate the bad debt expense. At June 30, 20A1 , ML reported net accounts receivables of $186,000. The outstanding receivables at June 30, 20A2 were $245,000. ML always considers 7% of the outstanding accounts receivable as uncollectible. During the year ML recovered bad debts of $2,500. This year the allowance was increased by 20% as compared to last year. The final balance in allowance for doubtful account was.