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Below is the net accounts receivable at January 31, 2020 for Maju Inc.: Accounts Receivable $370,000 Less: Allowance for sales discounts ($7,000) Less: Allowance for
Below is the net accounts receivable at January 31, 2020 for Maju Inc.:
Accounts Receivable $370,000
Less: Allowance for sales discounts ($7,000)
Less: Allowance for Doubtful Accounts ($67,150)
Net Receivable $295,850
Transactions during the year 2020 include the following:
- Sales Revenue was $440,000. $130,000 of the sales revenue was received in cash.
- Customer paid off $250,000 of the outstanding accounts receivable. Of this reduction to the accounts receivable, $50,000 was paid in time to earn a 3% discount.
- Accounts of $41,000 were written off during the year.
- An additional $10,700 was received in payment of an account that was written off in 2020.
- At year end, an analysis of accounts receivable indicates that an allowance of $4,000 is needed for sales discounts.
- At year end, Allowance for Doubtful Accounts was estimated to need a balance of $41,000. This estimate is based on an analysis of aged accounts receivable.
Required:
- Prepare journal entries for the above transactions. (12 points)
- Show how the net accounts receivable appear on the statement of financial position on December 31, 2020. (2 points)
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