Cullumber Corp. reported net incomes for the past three years as follows: 2023 $248,000 1 During the 2023 year-end audit, the following items come to your attention: Cullumber bought a truck on January 1, 2020 for $103,900 cash, with an $7,900 estimated residual value and a six-year life. The company debited an expense account for the entire cost of the asset. Cullumber uses straight-line depreciation for all trucks. 2. 2022 $232,000 3. 2021 $181,000 During 2023, Cullumber changed from straight-line depreciation for its cement plant to double declining balance. The following calculations present depreciation on both bases: Straight-line 2023 2022 2021 $18,480 $18,480 $18,480 23,716 30,800 36,960 Double-declining-balance The net income for 2023 was calculated using the double declining balance method. In reviewing its provision for uncollectible accounts during 2023, the corporation has determined that 1% is the appropriate amount of bad debt expense to be charged to operations. The company had used 1/2 of 1% as its rate in 2022 and 2021 when the expense had been $8,930 and $6,030, respectively. Cullumber recorded bad debt expense using the new rate for 2023. If they had used the old rate, they would have recorded $2,900 less bad debt expense on December 31.