Swathmore Clothing Corporation grants its customers 30 days' credit. The company uses the allowance method for...
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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 receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly. At the end of 2023, accounts receivable were $580,000 and the allowance account had a credit balance of $44,000. Accounts receivable activity for 2024 was as follows: Beginning balance. Credit sales Collections Write-offs Ending balance. Age Group $ 580,000 2,650,000 (2,513,000) The company's controller prepared the following aging summary of year-end accounts receivable: 0-60 days 61-90 days 91-120 days Over 120 days Total (42,000) $ 675,000 Summary Amount $385,000 92,000 52,000 146,000 $ 675,000 Percent Uncollectible 4% 12 22 33 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. 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 receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly. At the end of 2023, accounts receivable were $580,000 and the allowance account had a credit balance of $44,000. Accounts receivable activity for 2024 was as follows: Beginning balance. Credit sales Collections Write-offs Ending balance. Age Group $ 580,000 2,650,000 (2,513,000) The company's controller prepared the following aging summary of year-end accounts receivable: 0-60 days 61-90 days 91-120 days Over 120 days Total (42,000) $ 675,000 Summary Amount $385,000 92,000 52,000 146,000 $ 675,000 Percent Uncollectible 4% 12 22 33 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.
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1 Monthly Bad Debt Accrual and WriteOffs Journal Entry Bad Debt Expense 7... View the full answer
Related Book For
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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