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Question $3(1$ point$)$

Mills Corporation's balance sheet included the following information:

Accounts Receivable

$$500,000$

Less: Allowance for Doubtful Accounts $65,000$

Accounts Receivable, Net of Allowance $$435,000$

If the Allowance account had a credit balance of $$27,500$ immediately before the year$-$end adjustment for bad debts and no accounts were written$-$off or allowed for during the year, what was the amount of Bad Debt Expense recognized during the year?

$$65,000$

$$27,500$

$$32,500$

$$37,500$