Account receivable by age

over 90: $6,000

61-90days:$19,000

31-60 days: $43,000

1-30 days:$127,000

not yet due: $415,000

Makeup of current assets

supplies: $238,000

inventory:$845,000

cash:$366,000

account receivable:$610,000

percent uncollectible by age

not yet due: 3%

1-30: 5%

31-60: 8%

61-90: 37%

over 90: 72%

Makeup of Total Sales

cash sales: $1,125,000

credit sales:$3,575,000

Accounts Receivable by Age Over 90 days past due 61-90 days past due 31-60 days past due 1-30 days past due Not yet due $0 $300,000 $400,000 $100,000 $200,000 Accounts Receivable ($) Makeup of Current Assets Supplies Inventory Cash Accounts Receivable Value (5) Makeup of Total Sales Percent Uncollectible by Age 8096 Cash Sales 60% Estimated Percent Uncollectible 4096 Credit Sales Percent Uncollectible by Account 20% Credit Sales 196 0% Accounts Receivable 6% Not yet due 1-30 days past 31-60 days due past due 61-90 days Over 90 days past due past due The manager asks you to assist her with the data analytics on bad debts expense at year-end. To do this, you access the following Tableau Dashboard for your company. 1. Estimate the balance of the Allowance for Doubtful Accounts using aging of accounts receivable. Assume a $o existing balance in Allowance for Doubtful Accounts. 2. Make the adjusting entry to record Bad Debts Expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $2,500 credit and use of the aging of accounts receivables method. 3. Make the adjusting entry to record Bad Debts Expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is an $4,000 debit and use of the aging of accounts receivables method. 4. Based on further analysis, assume we find that the percentages in the graphic "Percent Uncollectible by Age" are too high. When alerting the manager, she responds that this is intentional. What are the income statement impacts from the overstated percentages? a) Overstated expenses and understated net income. b) Understated expenses and overstated net income. c) No impact on expenses or net income