The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2016, the allowance account had a credit balance of $6,995. Credit sales for 2016 totaled $477,385 and the year-end accounts receivable balance was $43,611. During this year, $3,147 in receivables were determined to be uncollectible and were written off. Manda Panda anticipates that 1% of all credit sales will ultimately become uncollectible.

What is the bad debt expense that Manda Panda should report in its 2016 income statement?