As the auditor, you are provided the following information regarding XYZ Corporations Accounts Receivables as of December 31, 2021.

From the General Ledger	Accounts Receivable	Allowance for Doubtful Accounts
Balance as of December 31, 2021	$282,143 debit	$ 6,400 debit
Balance as of December 31, 2020	201,806 debit	15,000 credit
From the detailed Accounts Receivable Subsidiary Ledger	Current	Over 30 days past due	Over 90 days past due	Over 120 days past due	Total
Dollars at 12/31/2021	$140,000	$30,000	$40,000	$70,643	$280,643
2021 % in each category	48.9%	10.7%	14.3%	25.1%	100%
2020 % in each category	60%	15%	15%	10%	100%
2019 % in each category	61%	21%	13%	5%	100%

Sales, write-offs and bad debt expense for the last three years per the General Ledger
Year	Sales	Write-Offs	Bad debt expense
2021	$1,600,000	$25,400	2,000
2020	1,800,000	42,000	37,000
2019	2,000,000	40,000	45,000

Additional Information:

The accounts receivable subsidiary ledger does not match to the general ledger because the general ledger includes an amount advanced to an employee for airline tickets associated with attending a sales trade show. The employee has since quit the firm and management believes that the advanced amount should now be shown as an expense.

One customer makes up $23,000 of the balance in the over 120 day past due category. In fact, this customers balance is 300 days past due. There are rumors that this customer is filing for bankruptcy and management believes that the amount recoverable will be zero.

In the past, management has found that 30% of amounts past 120 days due are generally uncollectible. The historical average of bad debts as a percent of sales for the last 10 years has been 2.75%.

Required: Assume that any discrepancies found are material to the financial statements. Please answer the following:

Do you believe that the Accounts Receivable balance should be increased, decreased or left the same? _________

Do you believe the allowance for doubtful accounts should be increased, decreased or left the same? ________

Do you believe that the bad debt expense account should be increased, decreased or left the same? ________

Do you believe that the selling expense account should be increased, decreased or left the same? _________

Do you believe that long-term assets should be increased, decreased of left the same? ________

Prepare any adjusting journal entries you feel are appropriate to bring the accounts discussed above into alignment with fair statement.