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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 2020, accounts receivable were $574,000 and the allowance account had a credit balance of $54,000. Accounts receivable activity for 2021 was as follows:

Beginning balance$574,000Credit sales2,620,000Collections(2,483,000)Write-offs(68,000)Ending balance$643,000

The company's controller prepared the following aging summary of year-end accounts receivable:

SummaryAge GroupAmountPercent Uncollectible0-60 days$430,0004%61-90 days98,0001591-120 days60,00025Over 120 days55,00040Total$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-a.What is total bad debt expense for 2021?

3-b.How would accounts receivable appear in the 2021 balance sheet?

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