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 2015, accounts receivable were $614,000 and the allowance account had a credit balance of $78,000. Accounts receivable activity for 2016 was as follows:

Beginning balance	$	614,000
Credit sales		2,820,000
Collections		(2,683,000)
Write-offs		(59,000)
Ending balance	$	692,000

The companys controller prepared the following aging summary of year-end accounts receivable:

Summary

Age Group

Amount

Percent Uncollectible

060 days

$

470,000

5

%

6190 days

82,000

11

91120 days

69,000

28

Over 120 days

71,000

36

Total

$

692,000

1.

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.)

2.	Prepare the necessary year-end adjusting entry for bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

What is total bad debt expense for 2016?

How would accounts receivable appear in the 2016 balance sheet?

Current Assets:

Accounts Receivable