Q5-60. Gordon Company uses the aging method in setting its allowance for doubtful receivables.

Allowance for doubtful accounts prior to adjustment has a credit balance of $2,900. Management estimates that due to the economic crisis, a higher level of allowance is necessary and decides that a $5,600 allowance is an appropriate amount at the year-end. The amount of expense to report on the Income Statement will be

a. $2,700.

c. $8,500.

b. $5,600.

d. $2,900.