A company reports the following on its 2016 balance sheet:

Account Receivable	328,000
Less: allowance for uncollectible accounts	(21,720)
Accounts receivable, net of allowance	306,280

Company records reveal that the Accelerate company owes the A company $4,600. Just after the 2016 year-end, the Accelerate company declares bankruptcy and it becomes clear to the A company that the A company will not be able to recover any money from the Accelerate company.

Indicate how this information affects the balance sheets and income statements in 2016 and 2017.