Why the uncollectible accounts expense amount is different

Question

The following information pertains to CJ's Cabinet Company's sales on account and accounts receivable:

Accounts Receivable Balance, January 1, 2014	$	124,720
Allowance for Doubtful Accounts, January 1, 2014		3,080
Sales on Account, 2014		823,330
Cost of Goods Sold, 2014		584,564
Collections of Accounts Receivable, 2014		853,245

After several collection attempts, CJ's Cabinet Company wrote off $2,830 of accounts that could not be collected. CJ's estimates that uncollectible accounts expense will be 1.75 percent of sales on account.

Required
a.	Compute the following amounts.

	(1)	Using the allowance method, the amount of uncollectible accounts expense for 2014. (Round your final answer to nearest whole dollar amount.)

	(2)	Net realizable value of receivables at the end of 2014. (Round intermediate calculations final answer to nearest whole dollar amount.)

b.	Why the uncollectible accounts expense amount is different from the amount that was written off as uncollectible. (Choose one)
	Uncollectible accounts expense is the actual amount that was determined in the current accounting period to be uncollectible. Uncollectible accounts expense is an estimate of current receivables that may eventually be uncollectible.