7-1 (Algo) Uncollectible accounts; allowance method; income statement and balance sheet approach; financial statement effects [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 2% 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. At the end of 2023, accounts receivable were $606,000 and the allowance account had a credit balance of $70,000. Accounts receivable activity for 2024 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance $ 606,000 2,780,000 (2,643,000) (55,000) $ 688,000 The company's controller prepared the following aging summary of year-end accounts receivable: Summary Age Group 0-60 days Amount $ 450,000 Percent Uncollectible 3% 61-90 days 74,000 13 91-120 days 65,000 24 99,000 39 $ 688,000 Over 120 days 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 2024? 3-b. How would accounts receivable appear in the 2024 balance sheet? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Prepare the necessary year-end adjusting entry for bad debt expense. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list View journal entry worksheet No Event General Journal 1 1 Bad debt expense Debit Credit Problem 7-1 (Algo) Uncollectible accounts; allowance method; income statement and balance sheet approach; financial statement effects [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 2% 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. At the end of 2023, accounts receivable were $606,000 and the allowance account had a credit balance of $70,000. Accounts receivable activity for 2024 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance $ 606,000 2,780,000 (2,643,000) (55,000) $ 688,000 The company's controller prepared the following aging summary of year-end accounts receivable: Summary Percent Age Group 0-60 days Amount $ 450,000 Uncollectible 38 61-90 days 74,000 13 91-120 days 65,000 24 Over 120 days Total 99,000 39 $ 688,000 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 2024? 3-b. How would accounts receivable appear in the 2024 balance sheet? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B What is total bad debt expense for 2024? Bad debt expense < Req 2 Req 3B > Problem 7-1 (Algo) Uncollectible accounts; allowance method; income statement and balance sheet approach; financial statement effects [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 2% 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. At the end of 2023, accounts receivable were $606,000 and the allowance account had a credit balance of $70,000. Accounts receivable activity for 2024 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance $ 606,000 2,780,000 (2,643,000) (55,000) $ 688,000 The company's controller prepared the following aging summary of year-end accounts receivable: Summary Percent Age Group 0-60 days Amount $ 450,000 Uncollectible 38 61-90 days 74,000 13 91-120 days 65,000 24 Over 120 days 99,000 39 Total $ 688,000 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 2024? 3-b. How would accounts receivable appear in the 2024 balance sheet? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B How would accounts receivable appear in the 2024 balance sheet? Balance Sheet (partial) Current assets: Accounts receivable (net) < Req 3A Req 3B