Sphere Corp operates on an industry that has high rate of bad debts. December 31, before any yearend adjustment, the balance in Sphere's Account Receivable

Sphere Corp operates on an industry that has high rate of bad debts. December 31, before any year–end adjustment, the balance in Sphere's Account Receivable account was $75,000 and the allowance for Doubtful Accounts had a balance of $37,500. Year-end balance reported in the statement financial position for the allowance for Doubtful Accounts will be based on the aging schedule shown below.

a. What is the appropriate balance for the allowance for Doubtful Accounts on December 31?
b. Show how accounts receivable would be presented on the balance sheet prepared on December 31?
c. What is the dollar effect of the year-end bad debit adjustment on the before-tax income for theyear?

Days Account Outstanding Less than 16 16 to 30 31 to 45 46 to 60 61 to 75 Over 75 Amount 450.000 150,000 75,000 45.000 15.000 15,000 Probabilitv of collection 0.99 0.94 0.8 0.65 0.5