The accounts of Quickly Company provided the following 2014 information at December 31st

Accounts receivable balance $600,000 (dr.)

Allowance for sales discounts $5,500 (cr.)

Allowance for doubtful accounts $40,000 (dr.)

In fact, the allowance for sales discounts is not needed at the end of 2015 and aging

shows that the allowance for doubtful accounts should be $65,000.

Required:

1. Prepare journal entries to adjust all allowances.

2. By how much have these entries changed earnings?

3. What is the net balance of accounts receivable that will be included on the

SFP?