Larkspur Discount Wholesale Company has a $141,800 balance in accounts receivable and a $490 debit balance in allowance for doubtful accounts at year-end just prior to recording adjusting entries. Credit sales for the period totaled $1,045,000. How much is the amount of the bad debt adjusting entry if Larkspur estimates that 3.5% of its receivables will be uncollectible?
a) $4,943
b) $3,904
c) $4,943
d) $3,994