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F 004484666
F 004484666
(a) July 1
Cash $ 283,500
Due from Factor $ 12,000 */
Loss on Sale of Receivables $ 4,500 **/
Accounts Receivable $
300,000
* /($12,000 = 4% X $300,000)
**/($4,500 = 1 1/2% X $300,000)
(b) July 1
Accounts Receivable $ 300,000
Due to JFK Corp. $
12,000
Financing Revenue $
4,500
Cash $
283,500
Exercise 3
P.7-5, Presented below is information related to the Accounts Receivable
accounts of Gulistan Inc during the current year 2004.
1. An aging schedule of the accounts receivable as of December 31, 2004,
is as follows.
% to be Applied after
Age Net debit balance Correction is made
Under 60 days $ 172,342 1%
61 - 90 days 136,490 3%
91 120 days 39,924 6%
Over 120 days _ 23,644 $ 4,200 definitely uncollectible, estimated
$ 372,400 remainder uncollectible is 25 %
Instructions :
Assuming the books have not been closed for 2004, make the
necessary correcting entries.
Answer of Exercise 3
Bad Debt Expense 2,740.00
Accounts Receivable 2,740.00