As the management accountant for the Tyson Company you have been asked to construct a financial planning model for collection of accounts receivable and then to perform a what-if analysis in terms of the assumption regarding estimated uncollectible accounts. You are provided with the following information:

Collection Pattern for Credit Sales: 55% of the companys credit sales are collected in the month of sale, 40% in the month following the month of sale, and 5% are uncollectible.

Credit Sales: January 2019, $149,500; February 2019, $147,000; March 2019, $157,500.

Required:

1. Prepare an estimate of bad debts for each of the three months, January through March, under the following assumptions regarding the rate of uncollectible accounts: 1%, 3%, 5% (base case), and 8%.