Digital Depot Company, which operates a chain of 40 electronics supply stores, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the firm is considering changing to the allowance method. Information is requested as to the effect that an annual provision of % 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 would have been at the end of each year. The following data have been obtained from the accounts:

	Year of Origin of Accounts Receivable Written Off as Uncollectible
Year	Sales	Uncollectible Accounts Written Off	1st	2nd	3rd	4th
1st	$12,500,000		$18,000		$18,000
2nd	14,800,000		30,200		9,000		$21,200
3rd	18,000,000		39,900		3,600		9,300		$27,000
4th	24,000,000		52,600				5,100		12,500		$35,000

Required:

1. Assemble the desired data. Enter all amounts as positive numbers.

Year	Expense Actually Reported	Expense Based on Estimate	Increase (Decrease) in Amount of Expense	Balance of Allowance Account, End of Year
1st	$fill in the blank 6d057d009fc0f92_1	$fill in the blank 6d057d009fc0f92_2	$fill in the blank 6d057d009fc0f92_3	$fill in the blank 6d057d009fc0f92_4
2nd	fill in the blank 6d057d009fc0f92_5	fill in the blank 6d057d009fc0f92_6	fill in the blank 6d057d009fc0f92_7	fill in the blank 6d057d009fc0f92_8
3rd	fill in the blank 6d057d009fc0f92_9	fill in the blank 6d057d009fc0f92_10	fill in the blank 6d057d009fc0f92_11	fill in the blank 6d057d009fc0f92_12
4th	fill in the blank 6d057d009fc0f92_13	fill in the blank 6d057d009fc0f92_14	fill in the blank 6d057d009fc0f92_15	fill in the blank 6d057d009fc0f92_16

2. Experience during the first four years of operations indicated that the receivables either were collected within two years or had to be written off as uncollectible. Does the estimate of % of sales appear to be reasonably close to the actual experience with uncollectible accounts originating during the first two years?

YesNo