Bad-Debt Reporting Presented below is information related to the Accounts Receivable accounts of Gulistan Inc. during the

Question:

Bad-Debt Reporting Presented below is information related to the Accounts Receivable accounts of Gulistan Inc. during the current year 2010.

1. An aging schedule of the accounts receivable as of December 31, 2010, is as follows.

2. The Accounts Receivable control account has a debit balance of $372,400 on December 31, 2010.

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, 2010, and a debit to Allowance for Doubtful Accounts because of a bankruptcy.

4. The Allowance for Doubtful Accounts is as follows for 2010.

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 the Accounts Receivable (60?90 days) of $4,840, which represents an advance on a sales contract. Assuming that the books have not been closed for 2010, make the necessary correcting entries

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...