Question

Swathmore Clothing Corporation grants its customers 30 days credit. The company uses the allowance method for its unconectible accounts receivable. During the year a monthly bad debt accruals made by multiplying 79 times the amount of credit sales for the month. At the fiscal year-end of December 31, an gng of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly. At the end of 2020, accounts receivable were $602 000 and the allowance account had a credit balance of $66.000 Accounts receivable activity for 2021 was as follows: 3 Beginning balance Credit sales Collections Write-offs Ending balance 6e2. 2,268,28 (2.625.000 $ 686, eee The company's controller prepared the following aging summary of year-end accounts receivable Summary Percent Uhallectible Age Group Amount 61 98 days 91-128 days Over 128 day's Total $686, 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 20212 3.b. How would accounts receivable appear in the 2021 balance sheet?

Please help need correct answers and

Answer 1

1
	Debit	Credit
Bad debt expense	55200		=2760000*2%
Allowance for uncollectible accounts		55200
Allowance for uncollectible accounts	53000
Accounts receivable		53000
2
	Debit	Credit
Bad debt expense	17170
Allowance for uncollectible accounts		17170
3a
Bad debt expense	72370		=55200+17170
3b
Balance sheet
Current assets:
Accounts receivable (net)	600630		=686000-85370
Workings:
	Amount	% uncollectible	Amount uncollectible
0—60 days	440000	5%	22000
61—90 days	70000	11%	7700
91—120 days	63000	22%	13860
Over 120 days	113000	37%	41810
Total	686000		85370
Beginning balance, Allowance	66000
Add: Monthly bad debt accruals	55200
Deduct: Write-offs	-53000
Unadjusted balance	68200
Required allowance	85370
Required year-end increase in allowance	17170