The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debt expense. The companys management estimates that 2% of net credit sales will be uncollectible for the year 2015. Net credit sales for the year amounted to $250,000. What will be the balance of the Allowance for Bad Debts reported on the balance sheet at December 31, 2015?

$5,285

$7,275

$7,000

$3,075