The following is a portion of the current assets section of the balance sheets of Avanti's, Inc., at December 31, 2020 and 2019:

12/31/2012/31/19Accounts receivable, less allowance for bad

debts of $9,716 and $17,296, respectively$176,915$221,540

Required:

a.If $11,970 of accounts receivable were written off during 2020, what was the amount of bad debts expense recognized for the year? (Hint: Use a T-account model of the Allowance account, plug in the three amounts that you know, and solve for the unknown.)

The December 31, 2020, Allowance account balance includes $3,052 for a past due account that is not likely to be collected. This account hasnotbeen written off.

(1)If it had been written off, will there be any effect of the write-off on the working capital at December 31, 2020?

• Yes
• No

(2)If it had been written off, will there be any effect of the write-off on net income and ROI for the year ended December 31, 2020?

• Yes
• No

c.The level of Avanti's sales in 2020 were probably lower as compared to 2019.

• True
• False