Problem 7-1 (Algo.) Uncollectible accounts, allowance method; income statement and balance sheet approach [L07-5, 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 2020, accounts receivable were $592,000 and the allowance account had a credit balance of $56,000. Accounts receivable activity for 2021 was as follows: $ Beginning balance Credit sales Collections Write-offs Ending balance 592,000 2,710,000 (2,573,000) (48,000) 681,000 $ The company's controller prepared the following aging summary of year-end accounts receivable: $ Age Group 0-60 days 61-90 days 91-120 days Over 120 days Total Amount 415,000 98,000 58,000 110,000 681,000 Summary Percent Uncollectible 4 % 12 28 39 $ 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 2021? 3-b. How would accounts receivable appear in the 2021 balance sheet