From its first day of operations to December 31, 2020, Cheyenne Corp. provided for uncollectible accounts receivable under the allowance method: 1. Entries for bad debt expense were made monthly based on 2.5% of credit sales. 2. Bad debts that were written off were charged to the Allowance for Doubtful Accounts. 3. Recoveries of bad debts previously written off were credited to the allowance account. 4. No year-end adjustments were made to the allowance account. The balance in Allowance for Doubtful Accounts was $194,000 at January 1, 2020. During 2020, credit sales totalled $9.8 million, interim entries for bad debt expense were based on 2.5% of credit sales, $99,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $20,000. Cheyenne upgraded its computer facility in November 2020, and an aging of accounts receivable was prepared for the first time as at December 31, 2020. Campbell's usual credit terms were net 30 days, and remain unchanged. A summary of the aging analysis follows: Classification by Month of Sale Balance in Each Category Estimated % Uncollectible November-December 2020 $1,190,000 8% July-October 2020 705,000 12.5% January-June 2020 480,000 20% Before January 1, 2020 140,000 65% $2,515,000 Based on a review of how collectible the accounts really are in the "Before January 1, 2020" aging category, additional receivables totalling $65,000 were written off as at December 31, 2020. The 65% uncollectible estimate therefore only applies to the remaining $75,000 in the category. Finally, beginning with the year ended December 31, 2020, Cheyenne adopted a new accounting method for estimating the allowance for doubtful accounts: it now uses the amount in the year-end aging analysis of accounts receivable.