A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts Receivable $ 395,000 debit Net Sales 1,000,000 credit All sales are made on credit. Based on past experience, the company estimates that 0.5% of net sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

Multiple Choice

$1,513

$3,950

$2,213

$5,350

$5,000