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Instructions Answer the questions relating to each of the five independent situations as requested. P7.3 (LO 3) Excel (Bad-Debt Reporting-Aging) Manilow Corporation operates in an
Instructions Answer the questions relating to each of the five independent situations as requested. P7.3 (LO 3) Excel (Bad-Debt Reporting-Aging) Manilow Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Manilow's Accounts The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. a Probability of Collection Days Account Outstanding Less than 16 days Between 16 and 30 days Between 31 and 45 days Between 46 and 60 days Between 61 and 75 days Over 75 days (to be written off) Amount $300,000 100,000 80,000 40,000 20,000 15,000 .98 .90 .85 .80 .55 .00 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
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