Flyer Company has provided the following information prior to any year-end bad debt adjustment:

• Cash sales, $165,000
• Credit sales, $465,000
• Selling and administrative expenses, $125,000
• Sales returns and allowances, $45,000
• Gross profit, $505,000
• Accounts receivable, $255,000
• Sales discounts, $29,000
• Allowance for doubtful accounts credit balance, $2,700

Flyer prepares an aging of accounts receivable and the result shows that 2% of accounts receivable is estimated to be uncollectible. How much is bad debt expense?

Multiple Choice

• $5,100.

• $2,346.

• $2,400.

• $7,800.