The controller for Swifty Corp. is concerned about certain business transactions that the company experienced during 2023. The controller, after discussing these matters with various individuals, has come to you as the CFO for advice. Swifty follows ASPE. The transactions at issue are presented below: 1. The company has decided to switch from the direct write-off method for accounting for bad debts to the percentage-of- sales approach. Assume that Swifty has recognized bad debt expense as the receivables have actually become uncollectible in the following way: 2. 3. From 2022 sales From 2023 sales 2022 10,500 2023 3,900 14,900 The controller estimates that an additional $21,800 in bad debts will be written off in 2024: $3,700 applicable to 2022 sales and $18,100 to 2023 sales. Inventory has been shipped on consignment. These transactions have been recorded as ordinary sales and billed as such (on account). At December 31, 2023, inventory billed and in the hands of consignees amounted to $173,000. The percentage markup on selling price is 20%. Assume that the consigned inventory is sold the following year. The company uses the perpetual inventory system. During 2023, Swifty sold $302,000 worth of goods on the instalment basis. The cost of sales associated with these instalment sales is $222,000. The company inadvertently handled these sales and related costs as part of their regular sales transactions. Cash of $93,500, including a down payment of $30,300, was collected on these instalment sales during 2023. Due to questionable collectibility, the instalment method was considered appropriate.