Swathmore Clothing Corporation grants its customers 30 daysâcredit. The company uses the allowance method for its uncollectibleaccounts receivable. During the year, a monthly bad debt accrual ismade by multiplying 2% times the amount of credit sales for themonth. At the fiscal year-end of December 31, an aging of accountsreceivable schedule is prepared and the allowance for uncollectibleaccounts is adjusted accordingly. At the end of 2012, accountsreceivable were $576,000 and the allowance account had a creditbalance of $40,000. Accounts receivable activity for 2013 was asfollows: Beginning balance $ 576,000 Credit sales 2,630,000Collections (2,493,000 ) Write-offs (40,000 ) Ending balance $673,000 The companyâs controller prepared the following agingsummary of year-end accounts receivable: Summary Age Group AmountPercent Uncollectible 0â60 days $ 435,000 3 % 61â90 days 98,000 1091â120 days 50,000 20 Over 120 days 90,000 30 Total $ 673,000Required: 1. Prepare a summary journal entry to record the monthlybad debt accrual and the write-offs during the year. (If no entryis required for a particular event, select "No journal entryrequired" in the first account field.) 2. Prepare the necessaryyear-end adjusting entry for bad debt expense. (If no entry isrequired for an event, select "No journal entry required" in thefirst account field.) 3.1 What is total bad debt expense for 2013?3.2 Calculate the amount of accounts receivable that would appearin the 2013 balance sheet?
Swathmore Clothing Corporation grants its customers 30 daysâcredit. The company uses the allowance method for its uncollectibleaccounts receivable. During the year, a monthly bad debt accrual ismade by multiplying 2% times the amount of credit sales for themonth. At the fiscal year-end of December 31, an aging of accountsreceivable schedule is prepared and the allowance for uncollectibleaccounts is adjusted accordingly. At the end of 2012, accountsreceivable were $576,000 and the allowance account had a creditbalance of $40,000. Accounts receivable activity for 2013 was asfollows: Beginning balance $ 576,000 Credit sales 2,630,000Collections (2,493,000 ) Write-offs (40,000 ) Ending balance $673,000 The companyâs controller prepared the following agingsummary of year-end accounts receivable: Summary Age Group AmountPercent Uncollectible 0â60 days $ 435,000 3 % 61â90 days 98,000 1091â120 days 50,000 20 Over 120 days 90,000 30 Total $ 673,000Required: 1. Prepare a summary journal entry to record the monthlybad debt accrual and the write-offs during the year. (If no entryis required for a particular event, select "No journal entryrequired" in the first account field.) 2. Prepare the necessaryyear-end adjusting entry for bad debt expense. (If no entry isrequired for an event, select "No journal entry required" in thefirst account field.) 3.1 What is total bad debt expense for 2013?3.2 Calculate the amount of accounts receivable that would appearin the 2013 balance sheet?
