Chao Corporation uses an aging method to estimate uncollectible accounts. As of December 31, they had $40,000 not yet due with a 1% expected loss, $20,000 that was 1-60 days past due with a 4% expected loss, and $4,000 over 60 days past due with an 8% expected loss. The allowance account had a credit balance of $400 before adjustment.