Portia Incorporated uses the percentage-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to $2,000,000, and management estimates 2% will be uncollectible. Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $1,900. The amount of expense reported on the income statement and the balance in Allowance for Uncollectible accounts, respectively, will be:
a) $41,900 and $40,000.
b) $40,000 and $38,100.
c) $38,100 and 40,000.
d) $40,000 and $41,900.