From inception of operations to 31 December 2022, Fortner Corporation provided for uncollectible accounts receivable under the allowance method. The provisions were recorded based on analysis of customers with different risk characteristics. Bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account; and no year-end adjustments to the allowance account were made. Fortners usual credit terms are net 30 days.

The balance in Allowance for Doubtful Accounts was $130,000 at 1 January 2022. During 2022, credit sales totalled $9,000,000, the provision for doubtful accounts was determined to be $180,000, $90,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $15,000. Fortner installed a computer system in November 2022, and an aging of accounts receivable was prepared for the first time as of 31 December 2022. A summary of the aging is as follows:

Classification by Month of Sale Balance in Each Category Estimated % Uncollectible November to December 2022 $1,080,000 2% July to October 2022 650,000 10% January to June 2022 420,000 25% Prior to 1 January 2022

150,000 80%

$2,300,000

Based on the review of collectability of the account balances in the prior to 1 January 2022 aging category, additional receivables totalling $60,000 were written off as of 31 December 2022. The 80% uncollectible estimate applies to the remaining $90,000 in the category. Effective with the year ended 31 December 2022. Fortner adopted a different method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable.

Instructions:

(a) Prepare a schedule analyzing the changes in Allowance for Doubtful Accounts for the. year ended 31 December 2022. Show supporting computations in good form.

(b) Prepare the journal entry for the year-end adjustment to the Allowance for Doubtful Accounts balance as of 31 December 2022.