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Chatter Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Chatter's Accounts Receivable account was $389,000 and the Allowance for Doubtful Accounts had a debit balance of $5,000. The year-end balance reported in the balance sheet for the Allowance for Doubtful Accounts will be based on the aging schedule shown below:
What is the appropriate balance for the Allowance for Doubtful Accounts at year-end?Show how accounts receivable would be presented on the balance sheet.What is the dollar effect of the year-end bad debt adjustment on the before-tax income?
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