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Question 3 (10 marks) You are preparing the December 31, Year 2, financial statements. Required a. (5 marks) Your analysis of accounts receivable indicates the following for Year 2: Accounts receivable - January $ 175.000 Allowance for doubtful accounts - January 1 17,500 Credit sales during the year 600,000 Cash collections during the year 575,000 Your analysis of the aged accounts receivable at the year indicates: 1. A key customer, Alpha, went bankrupt during the year, and there will be no further collections on this account receivable of $10,000. 2. After accounting for the Alpha receivable, an aging of the remaining accounts receivable at the end of the year indicated that an allowance for doubtful accounts of $2,500 is required as of December 31, Year 2 for other customers. Prepare the Year 2 journal entries required to (i) write-off the Alpha account receivable and to (ii) record bad debts expense (include your calculation). b. (5 marks) Your analysis of inventory indicates that Year 1 ending inventory was understated by $30,000 due to a counting error. Inventory at the end of Year 2 was correctly calculated. Indicate the effect of the error (if any) on each of the following, indicating whether overstated, understated, or not affected and provide the amount. i) Year 1 net income Year 1 cost of goods sold ii) December 31, Year 2 retained earnings ii)