NCE Problem 7-04 From inception of operations to December 31, 2020, Metlock Corporation provided for uncollectible accounts receivable under the allowance method. The provisions are recorded, based on analyses 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. Metlock's usual credit terms are net 30 days. The balance in Allowance for Doubtful Accounts was $141,000 (Cr.) at January 1, 2020. During 2020, credit sales totaled $9.166,000, the provision for doubtful accounts was determined to be $91,660, $91,660 of bad debts were written off, and recoveries of accounts previously written off amounted to $19,600. Metlock installed a computer system in November 2020, and an aging of accounts receivable was prepared for the first time as of December 31, 2020. A summary of the aging is as follows. Estimated % Uncollectible 29% Classification by Month of Sale November December 2020 July-October January-June Prior to 1/1/20 Balance in Each Category $1,284,200 689,600 441,800 164,400 $2,580,000 10% 2796 72% Based on the review of collectibility of the account balances in the prior to 1/1/20" aging category, additional receivables totaling $62,800 were written off as of December 31, 2020. The 72% uncollectible estimate applies to the remaining $101,600 in the category. Effective with the year ended December 31, 2020, Metlock adopted a different method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable. Prepare a schedule analyzing the changes in Allowance for Doubtful Accounts for the year ended December 31, 2020. Show supporting computations in good form. (Hint: In computing the 12/31/20 allowance, subtract the $62,800 write-off.) METLOCK CORPORATION Analysis of Changes in the Allowance for Doubtful Accounts For the Year Ended December 31, 2020 141 000 Balance at January 1, 2020 Provision for doubtful accounts Recovery in 2020 of bad debts written off previously 91.680 19,600 213.050 Less 184,400 Write-offs for 2020 Balance at December 31, 2020 before change in accounting estimate Increase due to change in accounting estimate during 2020 Balance at December 31, 2020 adjusted Computation of Allowance for Doubtful Accounts at December 31, 2020 Aging Doubtful Category Balance Accounts $ 2 Nov.-Dec. 1.284,200 25,684 % July-Oct. 68,960 689,600 N Jan.-June 119.286 441,800 118.368 Prior to 1/1/20 164,400 332,298 SHOW ANSWER Prepare the journal entry for the year-end adjustment to Allowance for Doubtful Accounts balance as of December 31, 2020. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Account Titles and Explanation Click if you would like to Show Work for this question:Open Show Work