Albertson's Locksmith Corporation started operations on January 1, 2019. Albertson's estimates uncollectibles using the percentage-of-credit-sales method. The following information pertains to the company's sales, receivables, and collections for the first three years of operation:

Albertson's estimates uncollectible accounts at 4 percent of credit sales.

INSTRUCTIONS:
a. What is the balance of the allowance for bad debts account as of the end of 2019, 2020, and 2021?
b. What is the (net) balance of the accounts receivable account as of the end of 2019, 2020, and 2021?
c. Comment on Albertson's annual estimates.

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2021 2020 2019 Credit sales $240,000 $190,000 $105,000 Cash sales 8,000 4,000 1,000 Total sales $248,000 $194,000 $106,000 Write-offs 8,400 6,000 3,000 Cash collections of A/R 214,000 161,000 92,000