Corporation A operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in the Accounts Receivable account was $565,000 and Allowance for Doubtful Accounts had a debit balance of $14,014. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below.

1. a) What is the appropriate balance for Allowance for Doubtful Accounts at year-end? b) What is the required charge (or posting) to Bad Debt Expense? c) Show how accounts receivable would be presented on the balance sheet.

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Probability of Collection .98 .90 Days Account Outstanding Amount Less than 16 days $303,000 Between 16 and 30 days 101,000 Between 31 and 45 days 81,000 Between 46 and 60 days 45,000 Between 61 and 75 days 20,000 Over 75 days 15,000 .85 .80 .55 .00