From inception of operations to December 31, 2017, Collin, Inc. provided for uncollectible accounts receivable under the allowance method: provisions were made monthly at 1% of credit sales; 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. Collins usual credit terms are net 30 days.

The balance in Allowance for Doubtful Accounts was $86,000 at January 1, 2017. During 2017, credit sales totaled $6,200,000,interim provisions for doubtful accounts were made at 1% of credit sales, $47,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $3,000. Collin installed a computer system in November 2017, and an aging of accounts receivable was prepared for the first time as of December 31, 2017. A summary of the aging is as follows.

Classification by Balance in Estimated %

Month of Sale Each Category Uncollectible

NovemberDecember 2017 $ 760,000 1%

JulyOctober 201,000 8%

JanuaryJune 89,000 30%

Prior to 1/1/2017 80,000 90%

$1,130,000

Based on the review of collectability of the account balances in the prior to 1/1/2017 aging category, additional receivables totaling $30,000 were written off as of December 31, 2017. The 90% uncollectible estimate applies to the remaining $50,000 in the category. Effective with the year ended December 31, 2017, Collin 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 December 31, 2017.Show supporting computations in good form. (Hint: In computing the 12/31/2017 allowance, subtract the $30,000 write-off).

(b) Prepare the journal entry for the year-end adjustment to the Allowance for Doubtful Accounts balance as of December31, 2017.