At the end of 2018, murray state lenders had a balance in its allowance for uncollectible accounts of $4,500 (credit) before any adjustment. the company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method. murray state's adjustment on december 31, 2018, to record its estimated uncollectible accounts included a:

Pear co.’s income statement for the year ended december 31, as prepared by pear’s controller, reported income before taxes of $125,000. the auditor questioned the following amounts that had been included in income before taxes: equity in earnings of cinn co. $ 40,000 dividends received from cinn 8,000 adjustments to profits of prior years for arithmetical errors in depreciation (35,000) pear owns 40% of cinn’s common stock, and no acquisition differentials are relevant. pear’s december 31 income statement should report income before taxes of