A company ends Year Three with accounts receivable of $300,000, an allowance for doubtful accounts of $20,000, sales of $900,000, and bad debt expense of $27,000. In Year Four, sales of $1 million more are made. Cash collections are $800,000, and an additional $15,000 in receivables are written off as uncollectible. The company always estimates that 5 percent of its ending accounts receivable will prove to be bad. What is the amount of bad debt expense reported on the income statement for Year Four? $22,350 $29,350 $35,000 $19,350