Question
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
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 2015, accounts receivable were $574,000 and the allowance account had a credit balance of $54,000. Accounts receivable activity for 2016 was as follows: Beginning balance $ 574,000 Credit sales 2,620,000 Collections (2,483,000) Write-offs (68,000) Ending balance $ 643,000 The companys controller prepared the following aging summary of year-end accounts receivable: Summary Age Group Amount Percent Uncollectible 060 days $ 430,000 4 % 6190 days 98,000 15 91120 days 60,000 25 Over 120 days 55,000 40 Total $ 643,000
What is total bad debt expense and accounts receivable (net) for 2016?
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