P $7-1$

Uncollectible accounts; allowance method; income statement and balance sheet approach; financial statement effects

LO$7-5,$

LO$7-6$

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 $$574,000$ ?and the allowance account had a credit balance of $$54,000.$ ?Accounts receivable activity for $2024$ ?was as follows:

$\backslash$table$[[$Beginning balance,$$574,000$