Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 $608.000 and the alowance account had a credit balance of $72.000. Accounts receivable activity for 2021 was as follows: Beginning balance Credit sales Collections Writurata Ending balance 5 600,000 2,790, DDD (2,653,000 156,000) 5 689,000 The company's controller prepared the following aging summary of year-end accounts receivable: Summary Age Group Amount Tezcant Uncollectible 0-60 daya $459.000 61-90 day 75,000 91-120 days 68,000 25 Over 120 days 52.000 40 Total $60,000 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? 3-6. How would accounts receivable appear in the 2021 balance sheet? Complete this question by entering your answers in the tabs below. Ruq Reg2 Req3A Reg 38 Prepare a summary joumal 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.) View transaction Journal entry worksheet 1 > Record a summary entry to record the monthly bad debt accrual. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general Journal Re: Reg 2 >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started