As a Controller of your company, you have just finished a seminar for sales managers about credit policies, especially accounting for bad debts. In your presentation, you report that the company's current bad debts expense is estimated to be $59,000, and the year-end accounts receivable balance is $1,800,000 less $50,000 allowance for doubtful accounts. The company estimated bad debts expense to be 2% of sales. At the end of the session, several sales managers question you about why bad debts expense and the allowance for doubtful accounts amounts are different. Prepare a response explaining why such a difference is not unusual.