Presented below is information related to the Accounts Receivable accounts of Gulistan Inc. during the current year 2025.

1. An aging schedule of the accounts receivable as of December 31, 2025, is as follows.

*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, 2025.

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, 2025, and a debit to Allowance for Doubtful Accounts because of a bankruptcy.

4. Allowance for Doubtful Accounts is as follows for 2025.

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 2025, make the necessary correcting entries.

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