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

• Cash sales, $158,000
• Credit sales, $458,000
• Selling and administrative expenses, $118,000
• Sales returns and allowances, $38,000
• Gross profit, $498,000
• Accounts receivable, $185,000
• Sales discounts, $22,000
• Allowance for doubtful accounts credit balance, $2,000

Flyer prepares an aging of accounts receivable and the result shows that 4% of accounts receivable is estimated to be uncollectible. How much is bad debt expense?

Multiple Choice

• $7,400.

• $9,400.

• $5,400.

• $5,320.