California Cannery began 2008 with a debit balance in accounts receivable of $150,000 and a credit balance in allowance for doubtful accounts of $7,500. During the year, California Cannery sold $1,300,000 of products and collected $1,350,000 from customers. In addition, $4000 if the accounts receivable balance wad written off as uncollectible during the year. Management uses the allowance method to account fir bad debut and believes that ultimately that 5 percent of the year end balance in accounts receivable will not be collected. How much bad debt expense will be recorded in 2008?
