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 $612,000 and the allowance account had a credit balance of $76,000. Accounts receivable activity for 2021 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance 612,000 2,810,000 (2,673,000) (58,000) 691,000 The company's controller prepared the following aging summary of year-end accounts receivable: Age Group 0-60 days 61-90 days 91-120 days Over 120 days Total Amount $465,000 80,000 68,000 78,000 $691,000 Summary Percent Uncollectible 5% 10 27 35 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? Reg 1 Req 2 Req Reg 3B Prepare a summary journal 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 list Journal entry worksheet Record a summary entry to record the monthly bad debt accrual. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal Reg 1 Reg 2 Req Reg 3B Prepare a summary journal 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 list Journal entry worksheet Record a summary entry to record the 2021 write-offs. Note: Enter debits before credits. General Journal Debit Credit Event 2 Record entry Clear entry View general journal Reg 1 Req 2 > Reg 1 Reg 2 Req Reg 3B Prepare the necessary year-end adjusting entry for bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the year-end adjusting entry for bad debt expense. Note: Enter debits before credits. General Journal Debit Credit Event 1 Record entry Clear entry View general journal Req 1 Reg 2 Req Req 3B What is total bad debt expense for 2021? Bad debt expense Reg 1 Reg 2 Req Req 3B How would accounts receivable appear in the 2021 balance sheet? Balance Sheet (partial) Current assets: Accounts receivable (net)
