Amount to Write$-$Off through the Accounts Receivable System $q,$

b$.$ Accounts receivable $($net$)$

c$.$ Allowance for Doubtful Accounts as a percent of Receivables after adjustments

d$.$ Decrease to before$-$tax income

hilow Corporation operates in an industry that has a high rate of bad debts. Before any year$-$end istments, the balance in Manilow's Accounts Receivable account was $$555,000$ and Allowance for ibtful Accounts had a credit balance of $$40,000.$ The year$-$end balance reported in the balance et for Allowance for Doubtful Accounts will be based on the aging schedule shown below.

$\backslash$table$[[,,,\backslash$table$[[$Probability of$],[$Collection$]]],[$Less than $16$ days,$$,300,000,0\mathrm{.}98],[$Between $16$ and $30$ days,,$100,000,0\mathrm{.}90],[$Between $31$ and $45$ days,,$80,000,0\mathrm{.}85],[$Between $46$ and $60$ days,,$40,000,0\mathrm{.}80],[$Between $61$ and $75$ days,$20,000,0\mathrm{.}55,],[$Over $75$ days $($to be written off$),,15,000,0],[,$$$,555,000,],[$wance before Adjustments,$$,(40,000),],[$wance as $\%$ of Receivables,,,$],[$efore adjustments,,$7\mathrm{.}2\%,]]$

ructions

What is the appropriate balance for Allowance for Doubtful Accounts at year$-$end?

Show how accounts receivable would be presented on the balance sheet.

$$60,000$

$$495,000$

What is the dollar effect of the year$-$end bad debt adjustment on the before$-$tax income?

$20,000$