Based on the following information:

Credit sales

$172,000

Collections on accounts receivable during the year

170,000

Cash sales

810,000

Unadjusted debit balance in Allowance for Doubtful Accounts

40

Sales returns and allowances for credit sales

2,000

Accounts receivable, beginning of the year

14,000

If bad debts are estimated to be 1 1/2% of ending accounts receivable, the adjusting entry to recognize bad debts will include a debit to Bad Debt Expense for

a.

$170

b.

$190

c.

$210

d.

$250

I need a detailed procedures for solving this problem. Thank you!