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 3% 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 $590,000 and the allowance account had a credit balance of $54,000. Accounts receivable activity for 2021 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance $ 590,000 2,700,000 (2,563,000) (47,000) $ 680,000 ces 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 Summary Amount Percent Uncollectible $410,000 5$ 97,000 11 57,000 27 116,080 38 $680,000 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 2021? 3-b. How would accounts receivable appear in the 2021 balance sheet? 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 Summary Amount Percent Uncollectible $410,000 5% 97,000 11 57,000 27 116,000 38 $680,000 . 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 2021? 3-b. How would accounts receivable appear in the 2021 balance sheet? nces Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Req 3B Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year. (If no entry is transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record a summary entry to record the monthly bad debt accrual. Reg 1 Reg 2 Reg 3A Reg 3B Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year. (I transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet ces Record a summary entry to record the monthly bad debt accrual. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal Req 1 Reatz Req 3A Req 3B Prepare the necessary year-end adjusting entry for bad debt expense. (If no entry is required for a transaction/ entry required" in the first account field.) k View transaction list Journal entry worksheet 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 Summary Amount Percent Uncollectible $410,000 5% 97,000 11 57,000 27 116,000 38 $680,000 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 2021? 3-b. How would accounts receivable appear in the 2021 balance sheet? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 3A Red 3B How would accounts receivable appear in the 2021 balance sheet? Balance Sheet (partial) Current assets Accounts receivable (net)
