Call Systems Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method

The method of accounting for uncollectible accounts that recognizes the expense only when accounts are judged to be worthless.

of recording bad debt expense

The operating expense incurred because of the failure to collect receivables.

has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the company is considering changing to the allowance method

The method of accounting for uncollectible accounts that provides an expense for uncollectible receivables in advance of their write-off.

. Information is requested as to the effect that an annual provision of 1% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts

The contra asset account for accounts receivable.

would have been at the end of each year. The following data have been obtained from the accounts:

Year	Sales	Uncollectible Accounts Written Off	Years of Origin of Accounts Receivable
			Written Off as Uncollectible
			(1st)	(2nd)	(3rd)	(4th)
1st	$ 817,300	$ 4,210	$4,210
2nd	1,228,000	9,010	2,540	$6,470
3rd	1,436,900	13,160	1,380	3,640	$8,140
4th	2,134,500	16,340		1,100	4,450	$10,790

	Required:
1.	Assemble the desired data to prepare a schedule of bad debt expense. Enter decreases as negative numbers using a minus sign.
2.	Experience during the first four years of operations indicated that the receivables were either collected within two years or had to be written off as uncollectible. Does the estimate of 1% of sales appear to be reasonably close to the actual experience with uncollectible accounts originating during the first two years?