The Phillips Company gathered the following information pertaining to its year ended December 31, 2020 prior to any adjustments:

Net Sales for the Year $780,000

Accounts Receivable, 12/31 165,000

Allowance for Uncollectible Accounts, 12/31 2,200 Debit

Assume that Phillips uses the percentage of outstanding accounts receivable method for uncollectible amounts. An aging of accounts receivable indicates that $9,550 will be uncollectible. Phillips will report the following amounts in its 2020 financial statements:

Select one:

a. Bad debts expense $9,550; Net accounts receivable $155,450

b. Bad debts expense $7,350; Net accounts receivable $157,650

c. Bad debts expense $11,750; Net accounts receivable $155,450

d. Bad debts expense $1,750; Net accounts receivable $157,650

e. Bad debts expense $9,550; Net accounts receivable $157,650