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From inception of operations to December 31, 2012, Harris Corporation provided for uncollectible accounts receivable under the allowance method: Provisions were made monthly at 2% of credit sales; 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. Harris's usual credit terms are net 30 days.
The balance in the Allowance for Doubtful Accounts was $130,000 at January 1, 2013. During 2013, credit sales totaled $9,000,000, interim provisions for doubtful accounts were made at 2% of credit sales, $90,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $15,000. Harris upgraded its computer facility in November 2013, and an aging of accounts receivable
was prepared for the first time as of December 31, 2013. A summary of the aging is as follows:
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