Presented below is information related to the Accounts Receivable accounts of Gulistan Inc. during the current year 2020. 1.    An aging schedule of the accounts receivable as of December 31, 2020, is as follows. Age    Net Debit Balance    % to Be Applied afterCorrection Is Made Under 60 days    $172,342     1% 60–90 days  136,490  3% 91–120 days   39,924* 6% Over 120 days   23,644  $3,700 definitely uncollectible;estimated remainderuncollectible is 25%   $372,400  *The $3,240 write-off of receivables is related to the 91-to-120 day category. 2.    The Accounts Receivable control account has a debit balance of $372,400 on December 31, 2020. 3.    Two entries were made in the Bad Debt Expense account during the year: (1) a debit on December 31 for the amount credited to Allowance for Doubtful Accounts, and (2) a credit for $3,240 on November 3, 2020, and a debit to Allowance for Doubtful Accounts because of a bankruptcy. 4.    Allowance for Doubtful Accounts is as follows for 2020. Allowance for Doubtful Accounts Nov. 3    Uncollectible accounts      Jan. 1    Beginning balance    8,750   written off 3,240 Dec. 31 5% of $372,400 18,620 5.    A credit balance exists in Accounts Receivable (60–90 days) of $4,840, which represents an advance on a sales contract. Instructions Assuming that the books have not been closed for 2020, make the necessary correcting entries.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Presented below is information related to the Accounts Receivable accounts of Gulistan Inc. during the current year 2020.

1.    An aging schedule of the accounts receivable as of December 31, 2020, is as follows.

Age    Net Debit Balance    % to Be Applied after
Correction Is Made
Under 60 days    $172,342     1%
60–90 days  136,490  3%
91–120 days   39,924* 6%
Over 120 days   23,644  $3,700 definitely uncollectible;
estimated remainder
uncollectible is 25%
  $372,400 

*The $3,240 write-off of receivables is related to the 91-to-120 day category.

2.    The Accounts Receivable control account has a debit balance of $372,400 on December 31, 2020.

3.    Two entries were made in the Bad Debt Expense account during the year: (1) a debit on December 31 for the amount credited to Allowance for Doubtful Accounts, and (2) a credit for $3,240 on November 3, 2020, and a debit to Allowance for Doubtful Accounts because of a bankruptcy.

4.    Allowance for Doubtful Accounts is as follows for 2020.

Allowance for Doubtful Accounts
Nov. 3    Uncollectible accounts      Jan. 1    Beginning balance    8,750
  written off 3,240 Dec. 31 5% of $372,400 18,620

5.    A credit balance exists in Accounts Receivable (60–90 days) of $4,840, which represents an advance on a sales contract.

Instructions

Assuming that the books have not been closed for 2020, make the necessary correcting entries.

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