Accounting 301 - In-class activity 5 - March 18,2023 From inception of operations to December 31, 2025, Peecan 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. Peecan's usual credit terms are net 30 days. The balance in Allowance for Doubtful Accounts was $86,000 at January 1, 2025. During 2025, credit sales totaled $6,200,000, interim provisions for doubtful accounts were made at $62,000, $47,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $3,000 (this can be accounted for by debiting Cash and crediting Allowance for Doubtful Accounts). Peecan installed a computer system in November 2025, and an aging of accounts receivable was prepared for the first time as of December 31, 2025. A summary of the aging is as follows: Classification by Month of Sale November-December 2025 July-October January-June Prior to 1/1/2025 Balance in Each Category $760,000 201,000 89,000 80,000 $1,130,000 Estimated % Uncollectible 1% 8% 30% 90% Based on the review of collectibility of the account balances the "prior to 1/1/2025" aging category, additional receivables totaling $30,000 were written off as of December 31, 2025. The 90% uncollectible estimate applies to the remaining $50,000 in the category. Effective with the year ended December 31, 2025, Peecan 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, 2025. Show supporting computations in good form. (Hint: In computing the 12/31/2025 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 December 31, 2025. c. Show the Accounts Receivable balance, net of Allowance for Doubtful Accounts as of December 31, 2025. d. Based on the information provided, using a T-account format, analyze all of the activity that occurred in Accounts Receivable and Allowance for Doubtful Accounts during 2025. If there are balances or other activity not provided make a note of that in the T-account.