At each calendar year-end, Cabool Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2011, it has outstanding accounts receivable of $136,500, and it estimates that 3% will be uncollectible.

Prepare the adjusting entry to record bad debts expense for year 2011 under the assumption that the Allowance for Doubtful Accounts has
(a)	a $3,814 credit balance before the adjustment.
(b)	a $2,504 debit balance before the adjustment.

(Omit the "$" sign in your response.)

Adjusting entries (all dated December 31, 2011).