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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 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 2020, accounts receivable were 5614,000 and the allowance account had a credit balance of $78,000 Accounts receivable activity for 2021 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance $ 614,000 2,820.000 12.683.600) (59,6081 $ 692.600 The company's controller prepared the following aging summary of year-end accounts receivable. Summary Age Group Amount Percent Uncollectible -6 days 3470,000 55 61-90 days 82,000 11 91-120 days 69,000 28 Over 120 days 71,000 36 Total 5692,000 Required: 1. Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs dunng the year 2. Prepare the necessary year-end adjusting entry for bad debt expense. 3.a. What is total bad debt expense for 2021? 3-6. How would accounts receivable appear in the 2021 balance sheet
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