3 Problem 7-1 Uncollectible accounts; allowance method; income statement and balance sheet approach [LO7-5,7-6) Swathmore Clothing Corporation grants its customers 30 days' credit. The company uses the allowance method for its uncollectible accounts receivable. During the year, a monthly bad debt accrual is made by multiplying 396 times the amount of credit sales for the month. At the fiscal year-end of December 31, an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly 4 points At the end of 2017, accounts receivable were $586,000 and the allowance account had a credit balance of $50,000 Accounts receivable activity for 2018 was as follows eBook Beginning balance Reference $ 586,000 Credit sales Collections (2,543,000) Write-offs(45,000) 2,680,000 Ending balance $678,000 The company's controller prepared the following aging summary of year-end accounts receivable Summar Percent Age Group Amount Uncollectible 0-60 days $400,000 61-90 days 91-120 days55,000 Over 120 days 95,000 128,000 $678,000 4% 15 25 36 Total Required 1. Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year 2. Prepare the necessary year-end adjusting entry for bad debt expense 3-a. What is total bad debt expense for 2018? 3-b. How would accounts receivable appear in the 2018 balance sheet? Complete this question by entering your answers in the tabs below. Req 1 Req 2Req 3AReq 3B Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Show less View transaction list Journal entry worksheet 2 Record a summary entry to record the monthly bad debt accrual Note: Enter debits before credits. Event General Journal Debit Credit Record entry View general journal Clear entry Req 1 Journal entry worksheet Record a summary entry to record the 2018 write-offs. Note: Enter debits before credits Event 2 General Journal Debit Credit Record entry View general journal Clear entry Req 2 Req 3AReq 3B Prepare the necessary year-end adjusting entry for bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the year-end adjusting entry for bad debt expense. Note: Enter debits before credits. Event General Journal DebitCredit Record entry View general journal Clear entry Complete this question by entering your answers in the tabs below. Req 1Req 2Req 3AReq 3B What is total bad debt expense for 2018? Bad debt expense Req 3B Complete this question by entering your answers in the tabs below. Req 1 Req 2Req 3A Req 3B How would accounts receivable appear in the 2018 balance sheet? Balance Sheet (partial) Current assets Accounts receivable (net) Req 3A Req 3B