as requested. P7.3 (LO 3) Excel (Bad-Debt Reporting-Aging) Manilow Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Manilow's Accounts Receivable account was $555,000 and Allowance for Doubtful Accounts had a credit balance of $40,000. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Days Account Outstanding Probability of Collection Amount Less than 16 days $300,000 -98 Between 16 and 30 days 100,000 -90 Between 31 and 45 days 80,000 .85 Between 46 and 60 days 40,000 80 Between 61 and 75 days 20,000 -55 Over 75 days (to be written off) 15,000 .00 Instructions a. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? b. Show how accounts receivable would be presented on the balance sheet. c. What is the dollar effect of the year-end bad debt adjustment on the before-tax income?

as requested. P7.3 (LO 3) Excel (Bad-Debt Reporting-Aging) Manilow Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Manilow's Accounts Receivable account was $555,000 and Allowance for Doubtful Accounts had a credit balance of $40,000. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Days Account Outstanding Probability of Collection Amount Less than 16 days $300,000 -98 Between 16 and 30 days 100,000 -90 Between 31 and 45 days 80,000 .85 Between 46 and 60 days 40,000 80 Between 61 and 75 days 20,000 -55 Over 75 days (to be written off) 15,000 .00 Instructions a. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? b. Show how accounts receivable would be presented on the balance sheet. c. What is the dollar effect of the year-end bad debt adjustment on the before-tax income?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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