Question $3$

We are analyzing E$-$Toys Corp and we have found the following information prior to any year$-$end bad debt adjusirnent:

Cash sales, $$164,000$

Credit sales, $$464,000$

Selling and administrative expenses, $$124,000$

Sales returns and allowances, $$44,000$

Gross profit, $$504,000$

Accounts receivable, $$245,000$ Sales discounts, $$28,000$

Allowance for doubtful accounts credit balance$($unused$),$ $$2,600$

E$-$Toys Corp prepares an aging of accounts receivable and the result shows that $3\%$ of accounts receivable is estimated to be uncollectible. Please, calculate the bad debt expense.

$2,850$

$4,570$

$4,750$

$3,500$