Kelton Inc. reported net credit sales of $370,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $675. The company has experienced bad debt losses of 2% of credit sales in prior periods. Using the percentage of credit sales method, what amount should the company record as an estimate of Bad Debt Expense?

Multiple Choice

• $2,700

• $8,075

• $2,025

• $7,400