At 31 December 20X8, Small Ltd, reported gross accounts receivable of $2,481,800. Investigation showed the following.

a. the credit balance in the allowance for doubtful accounts was $182,400 after write-off for the year but before any bad debt adjustment. Bad expense is based on a percentage of receivables. Based on the latest available facts. $ 280,000 will not be collected due to collection issues.

b. Terms of 1/10,n/30 were granted to all customers. Accounts receivable were recorded gross, and the discounts taken were recorded when taken by the customers in a discount account, reported contra to the sales account. Estimated discounts inherent in the closing accounts receivable balance were $30,600. The allowance for sales discounts account was established at $29,800 last year and has not been adjusted since.

1. Prepare year-end adjusting entries with respect to accounts receivable.

2. Show how the net accounts receivable would appear on the statement of financial position on 31 December 20X8.