P7-4 (L03) (Bad-Debt Reporting) From inception of ope uncollectible accounts receivable under the allowance method. The provisions are reco with different risk characteristics. rations to December 31, 2017, Fortner Corporation provided for off were charged to the allowance account based on analyses of customers recoveries of bad debts previ- Bad debts written ously written off Fortner's usual credit terms are net 30 days. were credited to the allowance account, and no year-end adjustments to the allowance account were made The balance in Allowance for Doubtful Accounts was s130,000 at January 1,2017 During 2017, credit sales totaled $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 S15,000. Fortner 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 Month of Sale Balance in Estimated % Uncollectible Each Category ber 2017 July-October January-June Prior to 1/1/17 $1,080,000 650,000 420,000 150,000 $2,300,000 10% 25% Based on the review of collectibility of the account balances in the "prior to 1/1/17" aging category, additional receivables totaling 60 000 were wntten off as of December 31, 2017 The 80% uncollectible estimate applies to the remaining $90,000 in the category Effective with the year ended December 31, 2017, Fortner adopted a different method for estimating the allowance for doubthul 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 12/31/17 allowance, subtract the $60,000 write-off.) (b) Prepare the journal entry for the year-end adjustment to Allowance for Doubtful Accounts balance as of December 31, 2017