Problem 7-3 (Part Level Submission)

Pearl Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Pearl's Accounts Receivable account was $595,600 and Allowance for Doubtful Accounts had a credit balance of $40,350. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below.

Days Account Outstanding		Amount			Probability of Collection
Less than 16 days		$314,500			0.97
Between 16 and 30 days		119,900			0.90
Between 31 and 45 days		84,800			0.85
Between 46 and 60 days		43,000			0.82
Between 61 and 75 days		19,800			0.53
Over 75 days		13,600			0.00

Assume that accounts with a zero percent chance of collection are intended to be written off.

Show how accounts receivable would be presented on the balance sheet.

PEARL CORPORATION Balance Sheet (Partial)