Rex loves to work with his hands and is very good at making small figurines. Three years ago, Rex opened Bronze Age Miniatures (BAM) for business as a sole proprietorship. BAM produces miniature characters ranging from sci-fi characters (his favorite) to historical characters like George Washington (the most popular). Business has been going very well for him, and he has provided the following information relating to his business.

1. In December, BAM agreed to a 12-month, $8,850 contract with Advertise-With-Us (AWU) to produce a radio ad campaign. BAM paid $3,600 up front (in December of this year) and AWU agreed that BAM would owe the remaining $5,250 only if BAMs sales increased by 15 percent over the 9-month period after the contract was signed.

What amount will increase taxable income (positive) or reduce taxable income (negative) for each of the above scenarios? (Enter the write-off of the receivable under e-1 and the sales under e-2. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)

1. = ?