Recompute after-tax net income for 1994 assuming that 1% of these Notes Receivable will ultimately be uncollectible. Perform the same computation assuming a 3 and 5% allowance for bad debts.

Consolidated Balance Sheet ( in thousands)

1994

Assets

Current assets

Cash $25,304

Accounts receivable, net 6,540

Notes receivable 16,906

Prepaid expense &other current assets 2,282

Deferred income tax 1,835

Total current assets 59,329

Property & equipment, net 163,314

Notes receivable 185,594

Deferred financing costs 8,343

Other assets 10,399

Total assets $426,982

Income before income tax 20,450

Income taxes 4,277

Net income 16,173