Bad debt expense is based on $1\mathrm{.}5\%$ of credit sales.

Allowance for doubtful accounts is based on $2\mathrm{.}5\%$ of total receivables at year$-$end.

Allowance for doubtful accounts is based on the following aging schedule: Not past due, $0\mathrm{.}5\%$; Past

due $1-60$ days, $1\%$; and Past due over $60$ days, $8\%.$

Bad debt expense is based on the direct write$-$off method $($assume entry in part a has not been recorded$).$

c$.$ Prepare the balance sheet disclosure showing accounts receivable less the allowance for doubtful accounts for each assumption $1$ through $4$ of part b$.$ For assumption $4$ only, assume there is a zero balance in the

allowance for doubtful accounts on December $31$ of the prior year.

d$.$ For reporting purposes in looking at part $b,$ what is one limitation when using assumption $1$ and when using assumption $4?$

Note: Do not use negative signs with any of your answers.