At the end of the year, Ryanes Company had the following information.Write-offs of verified bad debts during the year$ 13,000 Accounts receivable, end of year 135,000Credit sales for the year150,000Allowance for bad debts (before year-end adjusting entry)4,000 debit Historically, Ryanes has sometimes used the percentage of sales method and has sometimes used the allowance method in estimating bad debt expense. The percentages that Ryanes has used are as follows.Percentage of sales method4.0%Allowance method2.5%For this year, which ONE of the following statements is correct with respect to the comparison of bad debt expense computed using the percentage of sales method and the allowance method?

Bad debt expense using the percentage of sales method is HIGHER by $1,375.

Bad debt expense using the percentage of sales method is HIGHER by $2,625.

Bad debt expense using the percentage of sales method is HIGHER by $2,250.

Bad debt expense using the percentage of sales method is HIGHER by $5,375.

Bad debt expense using the allowance method is HIGHER by $1,375.

Bad debt expense using the allowance method is HIGHER by $1,750.

Bad debt expense using the allowance method is HIGHER by $1,975.

Bad debt expense using the allowance method is HIGHER by $3,375.