Computer Consulting Limited was started in early $2021$ and continued to operate until early $2024,$ when it was wound up due to disputes between the two principal owners. When it started, the company considered two sets of accounting policies:

Accounting policy set $1$ :

a$.$ Use straight$-$line depreciation method on the firm's only asset. The computer cost $$1,000,000$ and has an estimated useful life of four years.

b$.$ Estimate warranty expense as $9\%$ of sales.

c$.$ Estimate bad debts expense as $5\%$ of sales.

Accounting policy set $2$ :

a$.$ Use $50\%$ declining$-$balance method for depreciation.

b$.$ Estimate warranty expense as $10\%$ of sales.

c$.$ The year$-$end allowance for doubtful accounts should be $40\%$ of gross accounts receivable.

Actual events, cash flows, and transactions are as follows:

$\backslash$table$[[-,2021,2022,2023,2024],[$Sales $($all on account$),$$$3,000,000,$$$3,500,000,$$$4,000,000,$$$500,000$