Ace computing company On January 1, 2012, the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $40,000 and $1,500 respectively. During the year, the company reported $80,000 of credit sales. There were $500 of receivables written off as uncollected in 2012. Cash collections of receivables amounted to $78,200. The company estimates that it will be unable to collect 4% of the year-end accounts receivable balance. Refer to the Ace Computing Company. The amount of bad debts expense recognized in the 2012 income statement will be: a. $652 b. $1,450 c. $1,652 d. $142