The Dubious Company operates in an industry where all sales are made on account. The company has experienced bad debt losses

of $1\mathrm{.}30\%$ of credit sales in prior periods.

Presented below is the company's forecast of sales and expenses over the next three years.

Required:

a$.$ Calculate Bad Debt Expense and net income for each of the three years, assuming uncollectible accounts are estimated as $1\mathrm{.}30\%$ of

sales.

b$.$ Assume that the company changes its estimate of uncollectible credit sales to $1\mathrm{.}30\%$ in Year $1,2\mathrm{.}30\%$ in Year $2$ and $1\mathrm{.}80\%$ in Year $3.$

Calculate the Bad Debt Expense and net income for each of the three years under this alternative scenario.