As of December 31, 2017, Gill Co. reported accounts receivable of $225,000 and an allowance for uncollectible accounts of $9,200. During 2018, accounts receivable increased by $22,700, (that change includes $7,400 of bad debts that were written off). An analysis of Gill Co.'s December 31, 2018, accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. Bad debt expense for 2018 would be:

Multiple Choice

• $5,631.

• $7,400.

• $7,431.

• None of these answer choices are correct.