Question

Swathmore Clothing Corporation grants its customers 30 days’credit. 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 $606,000 and the allowance account had a credit balance of$70,000. Accounts receivable activity for 2013 was as follows:

Beginning balance	$	606,000
Credit sales		2,780,000
Collections		(2,643,000	)
Write-offs		(55,000	)
Ending balance	$	688,000

The company’scontroller prepared the following aging summary of year-endaccounts receivable:

	Summary
AgeGroup	Amount			Percent Uncollectible
0–60days	$	450,000			3	%
61–90 days		74,000			13
91–120 days		65,000			24
Over120 days		99,000			39
Total	$	688,000

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.)

1. Record monthly bad debt expense accrual summary.

2. Record year 2013 accounts receivable write-offs.

2.	Prepare the necessary year-end adjusting entry for bad debtexpense. (If no entry is required for an event, select "Nojournal entry required" in the first account field.) Record the year-end adjusting entry for bad debt expense

3.1	What is thetotal bad debt expense for 2013

3.2	Calculate theamount of accounts receivable that would appear in the 2013 balancesheet?