2. Brighton Corporation uses the allowance method of accounting for bad debts on its internal reports and has used a historical rate of 1% of credit sales to estimate its bad debt expense. Based on the 1%, bad debt expense recorded during the year was $54,000. The aged schedule of Brightons accounts receivable at December 31, Year 2, based upon past collection experience, is presented below.

Days outstanding Amount Probability of not being collected

0-30 $640,000 2%

31 - 60 180,000 8%

61 - 90 95,000 25%

Over 90 days 40,000 40%

Total 955,000

The allowance for uncollectible accounts had a credit balance of $76,500 on January 1, Year 2 and a credit balance of $51,850 on December 31, Year 2, before any for the audit adjustment required by the aging schedule.

Calculate the total bad debt expense for the year.