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 $$610,000$ and allowance for doubtful accounts of $$110,410.$ Patient Care manufactures and sells a wide range of healthcare products including Band$-$Aids and Tylenol. As of a

recent year, Patient Care reported accounts receivable of $$948,000$ and allowance for doubtful accounts of $$23,700.$

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

$\%$

b$.$ Compute the percentage of the allowance for doubtful accounts to the accounts receivable for Patient Care. Round your answers 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, since it is difficult to control the creditworthiness of customers entering the casino.