The Miller Company earned $123,000 of revenue on account during Year 2. There was no beginning balance in the accounts receivable and allowance accounts. During Year 2, Miller collected $82,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 3% of its sales on account.

The amount of uncollectible accounts expense recognized on the Year 2 income statement was:

Multiple Choice

• $2,460.
• $3,690.
• $41,000.
• $1,230.