On average, $5\%$ of total accounts receivable has been uncollectible in the past. At the end of the year, the balance of accounts receivable is $$100,000$ and the allowance for doubtful accounts has a credit balance of $$500.$ Credit sales during the year were $$150,000.$ Using the aging of accounts receivable method:

Multiple Choice

A$)$ the estimated bad debt expense is $$7,500.$

B$)$ the estimated bad debt expense is $$5,000.$

C$)$ The allowance for doubtful accounts balance should be $$7,500,$ after adjustment.

D$)$ more information is required in order to estimate bad debt expense.