Swathmore Clothing Corporation grants its customers 30 days credit. The company uses the allowance method...

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Accounting

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 2017, accounts receivable were $600,000 and the allowance account had a credit balance of $64,000. Accounts receivable activity for 2018 was as follows:

Beginning balance $ 600,000
Credit sales 2,750,000
Collections (2,613,000 )
Write-offs (52,000 )
Ending balance $ 685,000

The companys controller prepared the following aging summary of year-end accounts receivable:

Summary
Age Group Amount Percent Uncollectible
060 days $ 435,000 3 %
6190 days 93,000 10
91120 days 62,000 21
Over 120 days 95,000 36
Total $ 685,000

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 2018? 3-b. How would accounts receivable appear in the 2018 balance sheet?

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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 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 2017, accounts receivable were $600,000 and the allowance account had a credit balance of $64,000. Accounts receivable activity for 2018 was as follows: Beginning balance Credit sales Collections Write-offs Ending balance $ 600,000 2,750,000 (2,613,000) (52,000) $ 685,000 The company's controller prepared the following aging summary of year-end accounts receivable: Summary Percent Uncollectible 3 % Age Group 0-60 days 61-90 days 91-120 days Over 120 days Total Amount $435,000 93,000 62,000 95,000 $685,000 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 2018? 3-b. How would accounts receivable appear in the 2018 balance sheet? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3A 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 No journal entry required Accounts payable Accounts receivable Accrued interest receivable Record View general journal Complete this question by entering your answers in the tabs below. Req 1 Req2 Req 3A Req 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 2018 write-offs. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2 Reg 3A Req 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. Event General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2 Reg 3A Req 3B What is total bad debt expense for 2018? Bad debt expense Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 3B How would accounts receivable appear in the 2018 balance sheet? Balance Sheet (partial) Current assets: Accounts receivable (net)

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