Lynch Company reports the following information for its most recent fiscal year, before adjustments:

Sales	$821,500
Beginning Accounts Receivable Balance	$72,500
Sales Returns and Allowances	$12,200
Ending Accounts Receivable Balance	$68,845
Allowance for Doubtful Accounts	$4,100 (debit balance)

An accounts receivable aging schedule results in $7,100 of estimated bad debts. If Lynch uses the percentage-of-receivables basis to estimate bad debts, how much is the bad debt expense?

Group of answer choices

$7,100

$11,200

$8,200

$3,000