Problem 7-3 Buffalo Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Buffalo's Accounts Receivable account was $591,900 and Allowance for Doubtful Accounts had a credit balance of $44,990. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Probability of Collection Days Account Outstanding Amount 0.98 0.90 0.86 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 $314,500 112,400 85,000 44,200 19,900 15,900 0.79 0.55 0.00 Assume that accounts with a zero percent chance of collection are intended to be written off. What is the appropriate balance for Allowance for Doubtful Accounts at year-end? Balance for Allowance for Doubtful Accounts Show how accounts receivable would be presented on the balance sheet. BUFFALO CORPORATION Balance Sheet (Partial) What is the dollar effect of the year-end bad debt adjustment on the before-tax income? Dollar effect of the year-end bad debt adjustment Click if you would like to Show Work for this question: Open Show Work