Problem 2 Allowance for Doubtful Accounts: Egghead.com had the following key information related to its income statement and balance sheet on its 1996 financial statements: Accounts Receivable, net 1996 1995 24.079 20,494 Inventories, net 84,712 98,543 Sales 403,841 434,021 Cost of sales 357,373 380,428 From its Accounts Receivable Footnote: Company sales made on credit generally have terms of net 30 days. The sales and corresponding trade receivables for inventoried product are recorded upon merchandise shipment. The Company records provisions for doubtful accounts and sales returns and allowances based upon historical experience. Certain advertising and promotional expenditures are reimbursable from suppliers under cooperative advertising and other promotional and market development fund arrangements. Amounts qualifying for reimbursement are recorded as receivables from the suppliers and as a corresponding reduction of net advertising expense in the period the expenditure occurs. Also included in accounts receivable are credit card receivables and amounts due from vendors for returned inventory and other programs. The Company records a provision for uncollectible vendor receivables based upon historical experience. The allowances for doubtful accounts are $2,098 and $2,169 for 1996 and 1995, respectively. Assuming the Income Tax rate is 39%, what adjustment would be made to the balance sheet and income statement for the allowance for doubtful accounts assuming the prior year was more accurate