The Miller Company earned $109,000 of revenue on account during Year 1. There was no beginning balance in the accounts receivable and allowance accounts. During Year 1, Miller collected $75,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 3% of its sales on account.

What is the amount of uncollectible accounts expense that will be recognized on the Year 1 income statement?

Multiple Choice

$34,000

$2,250

$1,020

$3,270