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 3% 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, accounts receivablewere $590,000 and the allowance account had a credit balance of$54,000. Accounts receivable activity for 2013 was as follows:
Beginningbalance $ 590,000 Credit sales 2,700,000 Collections (2,563,000 ) Write-offs (47,000 ) Ending balance $ 680,000
The companyâs controllerprepared the following aging summary of year-end accountsreceivable:
Summary Age Group Amount Percent Uncollectible 0â60 days $ 410,000 5 % 61â90 days 97,000 11 91â120 days 57,000 27 Over 120 days 116,000 38 Total $ 680,000
Required:
1. Prepare a summary journal entry to record the monthly bad debtaccrual and the write-offs during the year. (If no entry isrequired for a particular event, select "No journal entry required"in the first account field.)
2. Prepare the necessary year-endadjusting 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 expensefor 2013?
3.2 Calculate the amount of accountsreceivable that would appear in 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 3% 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, accounts receivablewere $590,000 and the allowance account had a credit balance of$54,000. Accounts receivable activity for 2013 was as follows: |
| Beginningbalance | $ | 590,000 | |
| Credit sales | 2,700,000 | ||
| Collections | (2,563,000 | ) | |
| Write-offs | (47,000 | ) | |
| Ending balance | $ | 680,000 | |
| The companyâs controllerprepared the following aging summary of year-end accountsreceivable: |
| Summary | ||||||
| Age Group | Amount | Percent Uncollectible | ||||
| 0â60 days | $ | 410,000 | 5 | % | ||
| 61â90 days | 97,000 | 11 | ||||
| 91â120 days | 57,000 | 27 | ||||
| Over 120 days | 116,000 | 38 | ||||
| Total | $ | 680,000 | ||||
| Required: |
| 1. | Prepare a summary journal entry to record the monthly bad debtaccrual and the write-offs during the year. (If no entry isrequired for a particular event, select "No journal entry required"in the first account field.) |
| 2. | Prepare the necessary year-endadjusting 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 expensefor 2013? |
| 3.2 | Calculate the amount of accountsreceivable that would appear in the 2013 balance sheet? |
Related questions
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 3% 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, accounts receivablewere $578,000 and the allowance account had a credit balance of$42,000. Accounts receivable activity for 2013 was as follows: |
| Beginningbalance | $ | 578,000 | |
| Credit sales | 2,640,000 | ||
| Collections | (2,503,000 | ) | |
| Write-offs | (41,000 | ) | |
| Ending balance | $ | 674,000 | |
| The companyâs controllerprepared the following aging summary of year-end accountsreceivable: |
| Summary | ||||||
| Age Group | Amount | Percent Uncollectible | ||||
| 0â60 days | $ | 380,000 | 5 | % | ||
| 61â90 days | 100,000 | 11 | ||||
| 91â120 days | 51,000 | 21 | ||||
| Over 120 days | 143,000 | 32 | ||||
| Total | $ | 674,000 | ||||
| Required: |
| 1. | Prepare a summary journal entry to record the monthly bad debtaccrual and the write-offs during the year. (If no entry isrequired for a particular event, select "No journal entry required"in the first account field.) |
| 2. | Prepare the necessary year-endadjusting 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 expensefor 2013? |
| 3.2 | Calculate the amount of accountsreceivable that would appear in 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, accounts receivablewere $602,000 and the allowance account had a credit balance of$66,000. Accounts receivable activity for 2013 was as follows: |
| Beginningbalance | $ | 602,000 | |
| Credit sales | 2,760,000 | ||
| Collections | (2,623,000 | ) | |
| Write-offs | (53,000 | ) | |
| Ending balance | $ | 686,000 | |
| The companyâs controllerprepared the following aging summary of year-end accountsreceivable: |
| Summary | ||||||
| Age Group | Amount | Percent Uncollectible | ||||
| 0â60 days | $ | 440,000 | 5 | % | ||
| 61â90 days | 70,000 | 11 | ||||
| 91â120 days | 63,000 | 22 | ||||
| Over 120 days | 113,000 | 37 | ||||
| Total | $ | 686,000 | ||||
| Required: |
| 1. | Prepare a summary journal entry to record the monthly bad debtaccrual and the write-offs during the year. (If no entry isrequired for a particular event, select "No journal entry required"in the first account field.) |
| 2. | Prepare the necessary year-endadjusting 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 expensefor 2013? |
| 3.2 | Calculate the amount of accountsreceivable that would appear in the 2013 balance sheet? |
