For the problem below, change the first three percentages to 1% (NOT 2%), 8% (NOT 10%), 40% (NOT 25%), and then complete the problem. Instructions a. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? b. Show how accounts receivable would be presented on the balance sheet. c. What is the dollar effect of the year-end bad debt adjustment on the before-tax income? (CMA adapted) P7.4 (LO 3) (Bad-Debt Reporting) From inception of operations to December 31, 2020, Fortner Corporation provided for uncollectible accounts receivable under the allowance method. The provisions are recorded, based on analyses of customers with different risk characteristics. Bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account, and no year-end adjustments to the allowance account were made. Fortner's usual credit terms are net 30 days. The balance in Allowance for Doubtful Accounts was $130,000 (Cr.) at January 1, 2020. During 2020, credit sales totaled $9,000,000, the provision for doubtful accounts was determined to be $180,000, $90,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $15,000. Fortner installed a computer system in November 2020, and an aging of accounts receivable was prepared for the first time as of December 31, 2020. A summary of the aging is as follows. Estimated Uncollectible Classification by Month of Sale November-December 2020 July-October January-June Prior to 1/1/20 Balance in Each Category $1,000,000 650,000 420,000 150,000 $2,300,000 10 25% 80% Based on the review of collectibility of the account balances in the prior to 1/1/20" aging category, addi- tional receivables totaling $60,000 were written off as of December 31, 2020. The 80% uncollectible esti- mate applies to the remaining 590,000 in the category, Effective with the year ended December 31, 2020, Fortner adopted a different method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable