The following information relates to Shea Inc.?s accounts receivable for the 2020 fiscal year:

1. An aging schedule of the accounts receivable as at December 31, 2020, is as follows:

2. The Accounts Receivable control account has a debit balance of $372,400 on December 31, 2020.

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 $2,740 on November 3, 2020 and a debit to Allowance for Doubtful Accounts because of a bankruptcy.

4. Allowance for Doubtful Accounts is as follows for 2020:

5. There is a credit balance in Accounts Receivable (61?90 days) of $4,840, which represents an advance on a sales contract.

Instructions

Assuming that the books have not been closed for 2020, make the necessary correcting entries.

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% to Be Applied after Write Off Is Made Net Debit Balance Age Under 60 days 61-90 days 91-120 days Over 120 days $172,342 136,490 3% 39,924* 7% $4,200 definitely uncollectible; 20% of 23,644 $372,400 remainder is estimated uncollectible Allowance for Doubtful Accounts 11/3 Uncollectible accounts 2,740 written off 1/1 Beginning balance 8,750 18,620 12/31 5% of $372,400