Manilow Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Manilow's Accounts Receivable account was $609,800 and the Allowance for Doubtful Accounts had a credit balance of $44,500. 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 |
$319,200 |
0.97 |
| Between 16 and 30 days |
116,400 |
0.91 |
| Between 31 and 45 days |
88,600 |
0.85 |
| Between 46 and 60 days |
40,700 |
0.81 |
| Between 61 and 75 days |
27,600 |
0.57 |
| Over 75 days |
17,300 |
00 |
Assume that accounts with a zero percent chance of collection are intended to be written off.