P$8\mathrm{.}15$B $($LO $4)$ AP Financial Statement The adjusted trial balance of Eureka Company for the year ended December $31,2024,$ is as follows:

$\backslash$table$[[,$Debit,Credit$],[$Cash$,$$$,600,],[$Accounts Receivable,$4,050,],[$Notes Receivable,$9,450,],[$Merchandise Inventory,$15,000,],[$Equipment$,11,250,450],[$Allowance for Doubtful Accounts,,$1,500],[$Accumulated Depreciation$-$Equipment,$1,650,],[$Notes Payable,,$900],[$Accounts Payable,,$42,000],[$D$.$ Eureka, Capital,$1,500,19,500],[$D$.$ Eureka, Drawings,,$150],[$Sales$,12,000,],[$Interest Revenue,$2,100,],[$Cost of Goods Sold,$1,050,],[$Salaries Expense,$90,],[$Rent Expense,$60,],[$Bad Debt Expense,$$66,{150}_{?},],[$Service Charge Expense,,$],[,,]]$

Instructions

Prepare a multiple$-$step income statement, statement of owner's equity, and classified balance sheet. The notes payable are due on January $10,2025.$ The notes receivable are due on June $30,2025.$ The allowance for doubtful accounts applies to accounts receivable only.

Taking It Further Dane Eureka, the owner of Eureka Company, is pondering the possibility of changing its credit policies to increase sales. Currently, the company's terms are $\frac{n}{30},$ and he believes that terms of $\frac{1}{10},\frac{n}{45}$ will increase sales by about $40\%.$ Do you agree with Dane's assessment? Are there any potential disadvantages that Dane should consider? Explain.