Creek Company uses the percentage of credit sales method in determining its bad debt expense. The following information comes from the accounting records of Creek Company:

Cash sales	$ 240,000
Credit sales	760,000
Total sales	1,000,000
Credit balance in the Allowance for Doubtful Accounts	2,000
Bad debt loss rate	3%

What is the estimated bad debt expense?

Multiple Choice

• $22,800

• $28,000

• $24,800

• $30,000