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 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 2017, accounts receivable were $580,000 and the allowance account had a credit balance of $44,000. Accounts receivable activity for 2018 was as follows: Beginning balance Credit sales 580,000 2,650,000 , 513,000) (42,000) Collections Write-offs Si 675,000 Ending balance The company's controller prepared the following aging summary of year-end accounts receivable: Summary Amount Percent Uncollectible 4 Age Group 0-60 days 61-90 days 91-120 days $385,000 92,000 52,000 146,000 12 22 33 Over 120 days $675,000 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 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 required for a 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 Note: Enter debits before credits. Event General Journal Debit Credit View general journal Clear entry Record entry 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. (If entry required" in the first account field.) no entry is required for a transaction/event, select "No journal View transaction list Journal entry worksheet 1 Record the year-end adjusting entry for bad debt expense. Note: Enter debits before credits. Credit Debit General Journal Event 1 View general journal Clear entry Record entry The company's controller prepared the following aging summary of year-end accounts receivable Summary Age Group 0-60 days 61-90 days 91-120 days Over 120 days Amount Percent Uncollectible $385,000 92,000 52,000 4 12 22 146,000 33 $675,000 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. Reg 3B Req 1 Req 2 Req 3A What is total bad debt expense for 2018? Bad debt expense X Rea 3B Req 2 The company's controller prepared the following aging summary of year-end accounts receivable: Summary Age Group 0-60 days 61-90 days 91-120 days Amount Percent Uncollectible $385,000 92,000 48 12 52,000 22 Over 120 days 146,000 33 $675,000 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 3B Req 3A Req 2 Req 1 How would accounts receivable appear in the 2018 balance sheet? Balance Sheet (partial) Current assets: Accounts receivable (net) Req 30 Req 3A
