Title: Analysis of Patient Accounts Receivable and Allowance for Bad Debts at Metropolis Health System

Refer to the Metropolis Health System (MHS) balance sheet and statement of revenue and expense in the MHS Case Study appearing in Chapter 33. Patient accounts receivable of $7,400,000 is shown as net of $1,300,000 allowance for bad debts (8,700,000 2 1,300,000 5 7,400,000).
(1) What percentage of gross accounts receivable is the allowance for bad debts?
(2) If the allowance for bad debts is raised to $1,500,000, where does the extra $200,000 go?
Balnace sheet and statement revenue are included in the attachments