Swathmore Clothing Corporation grants its customers 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 times the amount of credit sales for the month. At the fiscal yearend of December an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly.
At the end of accounts receivable were $ and the allowance account had a credit balance of $ Accounts receivable activity for was as follows:
Beginning balance$ Credit salesCollectionsWriteoffsEnding balance$
The companys controller prepared the following aging summary of yearend accounts receivable:
Age GroupSummaryAmountPercent Uncollectible days$ days daysOver daysTotal$
Required:
Prepare a summary journal entry to record the monthly bad debt accrual and the writeoffs during the year.
Prepare the necessary yearend adjusting entry for bad debt expense.
a What is total bad debt expense for
b How would accounts receivable appear in the balance sheet?
