Swathmore Clothing Corporation grants its customers 30 days’ credit. The company
ID: 2450498 • Letter: S
Question
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 $598,000 and the allowance account had a credit balance of $62,000. Accounts receivable activity for 2016 was as follows:
Required:
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.)
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.)
How would accounts receivable appear in the 2016 balance sheet?
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.
Explanation / Answer
Swathmore Clothing Corporation grants its customers 30 days’ credit. The company
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