part b .

From inception of operations to December 31, 2020, Sage Corporation provided for uncoctible 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. Sage's usual credit terms are net 30 days. The balance in Allowance for Doubtful Accounts was $ 166,400 (Cr.) at January 1, 2020. During 2020, credit sales totaled $ 11,520,000, the provision for doubtful accounts was determined to be $ 230,400. $ 115,200 of bad debts were written off, and recoveries of accounts previously written off amounted to $ 19,200. Sage 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. Balance in Each Category Estimated % Uncollectible Classification by Month of Sale November December 2020 July-October $ 1.382.400 2% 832.000 10% January-June 537,600 25% Prior to 1/1/20 192.000 80% $ 2,944.000 Based on the review of collectibility of the account balances in the prior to 1/1/20" aging category, additional receivables totaling $ 76,800 were written off as of December 31, 2020. The 80% uncollectible estimate applies to the remaining $ 115,200 in the category. Effective with the year ended December 31, 2020, Sage adopted a different method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable. Your answer is partially correct. 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 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Bad Debt Expense 221000 Allowance for Doubtful Accounts 224000 e Textbook and Media Save for Later Attempts: 1 of 5 used Submit Answer SAGE CORPORATION Analysis of Changes in the Allowance for Doubtful Accounts For the Year Ended December 31, 2020 Balance at January 1, 2020 $ 166400 Provision for doubtful accounts 230400 Recovery in 2020 of bad debts written off previously 19200 416000 Less : Write-offs for 2020 192000 i Balance at December 31, 2020 before change in accounting estimate 224000 Increase due to change in accounting estimate during 2020 113408 Balance at December 31, 2020 adjusted 337408 Computation of Allowance for Doubtful Accounts at December 31, 2020 Aalina