Fullerton Company, which has been in business for three years, makes all of its sales on account and does not offer cash discounts. The firm's credit sales, collections from customers and write-off of uncollectible accounts for the three-year period are summarized below:

Year Sales Collections Accounts Written Off

2015 $300,000 $287,000 $2,200

2016 $385,000 $390,000 $3,350

2017 $430,000 $407,000 $3,650

Required:

A. If Fullerton Company had used the allowance of recognizing credit losses and had provided for such losses at the rate of 1.2 percent of credit sales, what amounts in accounts receivable and the allowance for doubtful accounts would appear on the firm's balance sheet at the end of 2017? What total amount of bad debts expense would have appeared on the firm's income statement during the three-year period?

B. Comment on the use of the 1.2 percent rate to provide for credit losses in part a.