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

• Cash sales, $156,000
• Credit sales, $456,000
• Selling and administrative expenses, $116,000
• Sales returns and allowances, $36,000
• Gross profit, $496,000
• Accounts receivable, $165,000
• Sales discounts, $20,000
• Allowance for doubtful accounts credit balance, $1,800

Flyer estimates bad debt expense assuming that 1% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?

Multiple Choice

• $4,320.

• $2,760.

• $6,360.

• $4,560.