On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $98,800; Allowance for Doubtful Accounts, credit balance of $1,121. What amount should be debited to Bad Debts Expense, assuming 5% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible?

Multiple Choice

• $6,061.

• $3,819.

• $1,121.

• $2,927.

• $4,940.