Cholowsky Camping Products sells its products either for cash or on notes receivable that earn interest. The business uses the direct write-off method to account for uncollectible accounts. Paul Cholowsky, the owner, has prepared Cholowsky Camping Products' financial statements. The most recent comparative income statements, for 2017 and 2016, are as follows:

Based on the increase in net income, Cholowsky seeks to expand his operations. He asks you to invest $60,000 in the business. You and Cholowsky have several meetings, at which you learn that notes receivable from customers were $120,000 at the end of 2016 and $540,000 at the end of 2017. Also, total revenues for 2017 and 2016 include interest at 12 percent on the year's ending notes receivable balance. Total expenses include bad debt expense of $7,200 each year, based on the direct write-off basis. Cholowsky estimates that bad debt expense would be 2 percent of sales revenue if the allowance method were used.
Required
1. Prepare for Cholowsky Camping Products a comparative single-step income statement that identifies sales revenue, interest revenue, bad debt expense, and other expenses, all computed in accordance with ASPE.
2. Is Cholowsky Camping Products' future as promising as Cholowsky's income statement makes it appear? Give the reason for your answer.

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Total revenue Total expenses Net income 2017 $528,000 282,600 $245,400 2016 $468,000 252,000 $216,000