Presented below is information related to the Accounts Receivable accounts of Gulistan Inc. during the current year 2014.
1. An aging schedule of the accounts receivable as of December 31, 2014, is as follows.
|
Age
|
|
Net Debit Balance
|
|
% to Be Applied after
Correction Is Made
|
| Under 60 days |
|
$170,600 |
|
|
1% |
| 60-90 days |
|
136,000 |
|
|
3% |
| 91-120 days |
|
39,400 |
* |
|
6% |
| Over 120 days |
|
23,700 |
|
|
$2,900 definitely uncollectible;
estimated remainder uncollectible is 25% |
|
|
$369,700 |
|
|
|
*The $2,400 write-off of receivables is related to the 91-to-120 day category
2. The Accounts Receivable control account has a debit balance of $369,700 on December 31, 2014.
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 $2,400 on November 3, 2014, and a debit to Allowance for Doubtful Accounts because of a bankruptcy.
4. Allowance for Doubtful Accounts is as follows for 2014.
|
Allowance for Doubtful Accounts
|
| Nov. 3 |
|
Uncollectible accounts written off |
|
2,400 |
Jan. 1 |
|
Beginning balance |
|
9,300 |
|
|
|
|
|
Dec. 31 |
|
5% of $369,700 |
|
18,485 |
5. A credit balance exists in the Accounts Receivable (60-90 days) of $5,500, which represents an advance on a sales contract.
Assuming that the books have not been closed for 2014, make the necessary correcting entries. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
|
Date
|
Account Titles and Explanation
|
Debit
|
Credit
|
| December 31, 2014 |
|
|
|
|
|
|
|
|
(To correct accounts due to account in bankruptcy.)
|
|
|
| December 31, 2014 |
|
|
|
|
|
|
|
|
(To correctly record the sales contract.)
|
|
|
| December 31, 2014 |
|
|
|
|
|
|
|
|
(To write off definitely uncollectible accounts)
|
|
|
| December 31, 2014 |
|
|
|
|
|
|
|
|
(To properly record the ending balance in the allowance account)
|