Rosco Works, Inc. estimated that $5,000 of the $98,000 balance in accounts receivable would be uncollectible. The allowance for doubtful accounts (ADA) already had a $400 credit balance at year-end. What adjustment to ADA is needed to ensure that accounts receivable is presented at the appropriate value on the balance sheet?

$5,400 debit

$400 debit

$4,600 credit

$5,000 credit