Problem 7-1 (Algo) 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 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 $614,000 and the allowance account had a credit balance of $78,000. Accounts receivable activity for 2021 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance $ 614,000 2,820,000 (2,683,000) (59,000) $ 692,000 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 Percent Uncollectible Summary $470,000 5% 82,000 11 69,000 28 71,000 36 $692,000