At the end of the current year, Bozeman Corporation is preparing its estimate of the allowance for uncollectible accounts. The company’s historical loss rate on accounts receivable, based on the most recent five-year period, has been approximately 1.25% of year-end receivables. Over this same period, the unemployment rate has averaged about 5.1% per year nationally and 4.6% in the geographic area served by Bozeman. The gross domestic product (GDP) growth rate has averaged 2.2% per year with a similar rate for the geographic area served by Bozeman. Following are three independent scenarios Bozeman Corporation might face in the coming months.
Scenario 1: A mild recession has begun to unfold. At year-end, the forecasted unemployment rate for the next two years is expected to rise both nationally and in the geographic area served by Bozeman. In addition, the GDP growth rate during the next two-year period is expected to decline.
Scenario 2: Toward the end of the current year, the economy has begun a modest expansion. The expansion is expected to continue for at least two more years. At year-end, the forecasted unemployment rate for the next two years is expected to be slightly lower nationally and even more significantly  lower in the geographic area served by Bozeman. In addition, the GDP growth rate during the next two-year period is expected to increase by at least 1% each year.
Scenario 3: A mild recession has begun to unfold. National unemployment rate and GDP growth rate are expected to trend unfavorably. However, at the same time, the unemployment and GDP growth rate for the geographic area are actually supposed to improve.

Required:
For each scenario, discuss how you would need to adjust the historical loss rate when estimating the loss rate for receivables for the current period. Specifically, would you expect to increase the loss rate, decrease the loss rate, or leave the loss rate about the same. Make sure to explain your reasoning.