ecure hitps-/ ack This window shows your responses and what was marked correct a

Question

ecure hitps-/ ack This window shows your responses and what was marked correct and incorrect from your previous attempt. 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 3% times the amount of credit sales for the month. At the fiscal year-end of December 31, an aging of accounts recelvable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly At the end of 2017, accounts receivable were $574,000 and the allowance account had a credit balance of $54,000. Accounts recelvable activity for 2018 was as follows: warded 04:1804 Beginning balance $574,000 2,620,000 Credit sales Collections Write-offe (2,483,000) (68,000 $643,000 Ending balance The company's controller prepared the following aging summary of year-end accounts receivable: Sumnary Amount Percent Uncollectible Age Group 0-60 days 61-90 days 91-120 days Over 120 days $430,000 98,000 60,000 55,000 15 25 40 Total $643,000 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.

Explanation / Answer

Part 1

Part 2

Bad debt expense= required allowance - (beginning balance+ monthly bad debt accruals-write offs)

= ((430000*4%)+(98000*15%)+(60000*25%)+(55000*40%))-(54000+78600-68000) = 4300

Part 3

Bad debt expense= 82900 (78600+4300)

PART 4

(643000-68900)=574100

Event general journal Debit credit 1. Bad debt expense (2620000*3%) 78600 Allowance for uncollectible accounts 78600 2. Allowance for uncollectible accounts 68000 Accounts receivable 68000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.