Amount of credit sales for the month

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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 2% 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 2015, accounts receivable were $608,000 and the allowance account had a credit balance of $72,000. Accounts receivable activity for 2016 was as follows: Beginning balance $ 608,000 Credit sales 2,790,000 Collections (2,653,000) Write-offs (56,000) Ending balance $ 689,000 The company's controller prepared the following aging summary of year-end accounts receivable: Summary Age Group Amount Percent Uncollectible 0-60 days $ 455,000 5 % 61-90 days 76,000 14 91-120 days 66,000 25 Over 120 days 92,000 40 Total $ 689,000 Required: 1. Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Prepare the necessary year-end adjusting entry for bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 3-1. What is total bad debt expense for 2016? 3-2. How would accounts receivable appear in the 2016 balance sheet? 

Reference no: EM13922287

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