Lina Co. uses the percentage-of-receivables basis to record bad debts expense. It estimates that 1% of accounts receivable will become uncollectible. Accounts receivable are $200,000 at the end of the year, and the allowance for doubtful accounts has a debit balance of $500, the amount of accounts receivable at year end is:

Select one:

a. $200,000.

b. $202,000.

c. $197,500.

d. $198,000.