Nature of Uncollectible Accounts

The XYZ Corporation owns and operates hotels and casinos including the XYZ Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, XYZ reported accounts receivable of $$410,000$ and allowance for doubtful accounts of $$64,780.$ Patient Care manufactures and sells a wide range of healthcare products including Band$-$Aid ${?}^{}$ bandages and Tylenol ${?}^{}.$ As of a recent year, Patient Care reported accounts receivable of $$873,000$ and allowance for doubtful accounts of $$48,015.$

a$.$ Compute the percentage of the allowance for doubtful accounts to the accounts receivable for the XYZ Corporation. Round your answer to one decimal place.

$\%$

b$.$ Compute the percentage of the allowance for doubtful accounts to the accounts receivable for Patient Care. Round your answer to one decimal place.

$\%$

c$.$ Possible reasons for the difference in the two ratios computed in $($a$)$ and $($b$)$ include:

a$.$ Casino operators historically lose money on operations.

b$.$ Casino operators have larger accounts receivable.

c$.$ Individuals who may have adequate creditworthiness could overextend themselves and lose more than they can afford if they get caught up in the excitement of gambling.

d$.$ Casino operations experience greater bad debt risk because it is difficult to control the creditworthiness of customers entering the casino.