A company has $97,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $870 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

Multiple Choice

• $3,010

• $3,845
• $3,915
• $3,880

• $4,750