Homework: Ch 5 i Saved 12 ! Required information Part 3 of 3 The following information applies to the questions displayed below.] 1.25 In an effort to boost sales in the current year, Roy's Gym has implemented a new program where members do not have to points pay for their annual membership until the end of the year. The program seems to have substantially increased membership and revenues. Below are year-end amounts. eBook Membership Accounts Revenues Receivable Print Last year $130, 000 $ 5, 600 Current year 390, 000 166, 000 References Arnold, the owner, realizes that many members have not paid their annual membership fees by the end of the year. However, Arnold believes that no allowance for uncollectible accounts should be reported in the current year because none of the nonpaying members' accounts have proven uncollectible. Arnold wants to use the direct write-off method to record bad debts, waiting until the end of next year before writing off any accounts. 3. Based on your answer in Part 2, for what amount will total assets and expenses be misstated in the current year if Arnold u direct write-off method? Ignore tax effects. Misstated amount Mc Graw Hill