Exercise 7-4 Using an Aging Schedule to Account for Bad Debts Carter Company sells on credit with terms of n30. For the $500,000 of accounts at the end of LO1 EXAMPLE dhe vear that are not overdus, there is a 90% probability of collection. For the $200,000 of accounts that are less than a month past due, Carter estimates the likelihood of collection going 70%. The probability of collecting the $100,000 of accounts more than a month past down to due is estimated to be 25%. Required I. Prepare an aging schedule to estimate the amount of uncollectible accounts On the basis of the schedule in part (1), identify and analyze the adjustment needed to estimate bad debts. Assume that the balance in Allowance for Doubtful Accounts is $20,000