The Allowance for Bad Debts Account Has a Credit Balance

The Allowance for Bad Debts account has a credit balance of $2,000 before the adjusting entry for bad debts expense.The company's management estimates that 2% of net credit sales will be uncollectible for the year 2017.Net credit sales for the year amounted to $270,000.What will be the balance of Allowance for Bad Debts on the December 31,2017 balance sheet?

A) $5,400
B) $2,000
C) $7,400
D) $5,360