Barth Company, which has been in business for three years, makes all of its sales on credit and does not offer cash discounts. Its credit sales, customer collections, and write-offs of uncollectible accounts for its first three years follow:

a. Barth recognizes bad debts expense as \(1 \%\) of sales. (Hint: This means the allowance account is increased by \(1 \%\) of credit sales regardless of any write-offs and unused balances.) What does Barth's 2013 balance sheet report for accounts receivable and the allowance for uncollectible accounts? What total amount of bad debts expense appears on Barth's income statement for each of the three years?

b. Comment on the appropriateness of the \(1 \%\) rate used to provide for bad debts based on your analysis in part \(a\).

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Year Sales 2011... $642,000 2012..... 765,000 2013..... 863,000 Collections $624,000 755,000 829,000 Accounts Written Off $4,200 4,700 5,400