The net accounts receivable on the books of GJY Corp. as of 1 January 20X3 are as follows:

Accounts receivable .............................................................    $ 281,000

Less: Allowance for sales discounts ..................................             6,000

Allowance for doubtful accounts ......................................           20,650
                                                                                                        $254,350

During the year, the sales discount allowance is left unchanged, with discounts recorded directly in the sales discounts account. Allowances are adjusted at year end. Summarized transactions during 20X3 are as follows:

a. Sales revenue was $620,000, of which 70% was on credit.

b. Customers paid off $492,500 of the outstanding accounts receivable. Of this reduction to the accounts receivable, $300,000 was paid in time to earn a 2% discount.

c. Accounts of $7,650 were written off at year end.

d. There were recoveries of previously written off accounts in the amount of $1,400.

e. At year end, analysis of accounts receivable indicates that an allowance of $3,950 is needed for sales discounts.

f. At year end, the allowance for doubtful accounts is increased by 1% of gross credit sales.

Required:

1. Prepare journal entries for the above transactions.

2. Show how the net accounts receivable appear on the statement of financial position on 31 December 20X3.

3. Do you have any concerns about the level of the allowance for doubtful accounts? Explain.