Accounts Receivable Analysis Kate Miller owns a dance studio in Los Angeles, California. Students can buy access to the dance classes by paying a monthly fee. Unfortunately, many of Kate's students are struggling actors and actresses who lack the ability to pay their bills in a timely manner. And, although the students were expected to pay for classes in advance, Kate began offering credit to many of her students to grow her business. This, however, put Kate in a serious liquidity problem as revealed by the growing balance in the studio's outstanding accounts receivable Accounts Receivable Historical Estimate Outstanding Balance of Non-Collection Classification 0-30 days 31-60 days 61-90 days 91-120 days 121-150 days 150 days $44,000 31,000 22,000 13,000 9,000 5,000 4% 896 12% 14% 20% 50% Kate's accountant, Matt Thomas, tried to help her get a handle on the studio's accounts receivable problem, but to little avail. One trick he successfully used in the past to make Kate realize the seriousness of the problem was to overestimate the extent of Kate's bad debt problem; consequently, there currently exists a balance in the allowance for uncollectible accounts totaling $2,700 Required 1. The first step to help get Kate's business back on track is to write off all receivables having a very low probability of collection (those accounts over 150 days). What balance sheet accounts will be affected, and in what amount, when Matt executes this action? Indicate which balance sheet accounts will be affected by choosing Yes or No for each account: Net revenue Accounts receivable Bad debt expense Cash Accounts payable Allowance for uncollectible accounts