1. The last two financial statements for T.P. Jarmon are as follows: T.P. Jarmon Balance Sheets for December 31, 2018 and 2019 Assets Cash Marketable securities Account receivables Inventory Prepaid Expenses Total current assets Net plant and equipment Total assets Liabilities and stockholders' equity Account payable Notes payable Accruals Total current liabilities Long-term debt Common stockholders' equity Total liabilities and equity 2018 2019 15,000 14,000 6,000 6,200 42,000 33,000 51,000 84.000 1,200 1,100 115,200 138,300 286,000 270,000 401,200 408,300 2018 2019 48,000 57.000 15,000 13,000 6,000 5,000 69,000 75,000 160,000 150,000 172,200 183,300 401,200 408,300 T.P. Jarmon Income Statement for December 31, 2019 Sales (all credit) Cost of goods sold Gross profit General and administrative expenses Depreciation Total operating expenses Net operating income Interest expenses Earnings before taxes Taxes Net income 600,000 (460,000) 140,000 (30,000) (30,000) (60,000) 80,000 (10,000) 70,000 (27.100 42,900 Which of the following circumstances might indicate that management is manipulating the alowance for doubtful accounts? A company lowers its credit standards and the allowance account decreases. A comparvy towers its credit standards and the allowance account increases. A comparvy tightens its credit standards and the allowance account decreases. A comparvy tightens its credit standards and the allowance account increases