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 $596,000 and the allowance account had a credit balance of $60,000. Accounts receivable activity for 2016 was as follows:

Beginning balance	$	596,000
Credit sales		2,730,000
Collections		(2,593,000)
Write-offs		(50,000)
Ending balance	$	683,000

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

Summary

Age Group

Amount

Percent Uncollectible

060 days

$

425,000

5

%

6190 days

91,000

14

91120 days

60,000

30

Over 120 days

107,000

41

Total

$

683,000

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.

3-1.	What is total bad debt expense for 2016?

3-2.	How would accounts receivable appear in the 2016 balance sheet?