swathmore clothing corporation

402 SECTION 2 Assets Required: Prepare the journal entries by Third BancCorp necessitated by the restructuring of the debt at 1. January 1,2018 2. December 31, 2018 3. December 31, 2019 E 7-34 Impairment of notes receivable: At January 1, 2018, NCI Industries, Inc., was indebted to First Federal Bank under a S240000, 0% unsecured note. The note was signed January 1. 2016, and was due December 31, 2019. Annual interest was last paid orn December 31, 2016. NCI was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. First Federal agreed to reduce last year's interest and the remaining two years' interest payments to $11,555 each and delay all payments until December 31, 2019, the maturity date. Required: Prepare the journal entries by First Federal Bank necessitated by the restructuring of the debt at 1. January 1,2018 2. December 31, 2018 3. December 31, 2019 troubled debt restructuring Appendix 78 Problems aconnect 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 debe accrual is made by multiplying 3times 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 P7-1 Uncollectible At the end of 2017, accounts receivable were $574,000 and the allowance account had a credit balance of $54,000. Accounts receivable activity for 2018 was as follows: method; income statement and balance sheet approach $574,000 2,620,000 (2,483,000) (68,000) S 643,000 Beginning balance Credit sales Collections Write-offs Ending balance LO7-5, L07-6 0 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 $430,000 98,000 60,000 15 25 40 Total $643,000 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, What is total bad debt expense for 2018? How would accounts receivable appear in the 2018 balance sheet? P7-2 Uncollectible accounts; Amdahl Amdahl Corporation manufactures large-scale, high performance computer systems. In a recent annual the balance sheet included the following information (S in thousands)c Current Year Previous Year LOT-5 Real World Current assets: Receivables, net of allowances of $5,042 $504.944 $580,640o and $6,590 in the previous year In addition, the income statement reported sales revenue of $2.158,755 (S in thousands) for the c All sales are made on a credit hasis. The statement of cash flows indicates that cash collected from daring the current year was $2,230,065 (S in thousands). There were no recoveries of accounts receivable ously written off current year. previ