During the year, Grace, Inc., has total sales of $800,000. Based on total sales, the corporation estimates that its bad debts for the year are 2% of sales. As a result, the corporation deducts $16,000 in bad debts for financial accounting purposes. At the end of the year, the controller reviews the accounts receivable ledger to identify uncollectible accounts. She determines that $3,900 in accounts receivable cannot be collected. In addition, the accountant’s analysis shows that the corporation has recovered $1,400 in accounts receivable written off as a bad debt for tax purposes in the previous year. How should this information be reported for tax purposes?