I am struggling with the following question. I believe the bad debt expense would be = 800,000*.75*.02 = 12,000 and that the allowance for doubtful accounts would be that 12,000 + 15,000; but I'm not confident I am doing this correctly. Am I misunderstanding this question/missing something?

Prior to the year-end adjustment to record bad debt expense the ledger of Stickler Company included the following accounts and balances:

Allowance for doubtful accounts$15,000

Bad debt expense0

Accounts Receivable200,000

Cash collections on accounts receivable during 2010 amounted to $450,000. Sales revenue during 2010 amounted to $800,000, of which 75% was on credit, and it was estimated that 2% of the credit sales made in 2010 would ultimately become uncollectible.

Determine the balances of the allowance for doubtful accounts and bad debt expense after the adjustment to record bad debt expense was made. The allowance for doubtful accounts has a credit balance prior to the adjusting entry.