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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 2015, accounts receivable were $614,000 and the allowance account had a credit balance of $78,000. Accounts receivable activity for 2016 was as follows: Beginning balance Credit sales $ 614,000 2,820,000 (2,683,000) Collections Write-offs (59,000) Ending balance $ 692,000 The company's controller prepared the following aging summary of year-end accounts receivable Summary Age Group Amount 0-60 days $470,000 61-90 days 82,000 91-120 days 69,000 Over 120 71,000 days Percent Uncollectible 5% 11 28 36 Total $692,000 View transaction list Journal entry worksheet 1 2 2 > 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 2. 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
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