The answer i posted are incorrect Swat more Cothing Corporation grants its custo

Question

The answer i posted are incorrect Swat more Cothing Corporation grants its customers 30 days aedt The company uses te alowance metod tr uncolettie accounts ecenat-. D ng he y monthly ba, ste o enal-- a mutoy g 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 llowance for uncollectible accounts is adjusted accordingly At the end of 2017, accounts receivable were $394,000 and the allowance account had a credt balance of $58,000. Accounts receivable activity for 2018 was as Credi sales Collections Wrte-offs Ending balance 594,000 2,720,000 (2,583,000) 000) 5 82,000 The company's controlier prepared the following aging summary of year end accounts receivable 61-90 days 91-120 days Over 120 days 420,000 90,000 59,000 113,000 662000 29

Explanation / Answer

Age-group Amount % uncollectible Amount uncollectible 0-60 days 420000 3% 12600 61-90 days 90000 13% 11700 91-120 days 59000 29% 17110 Over 120 days 113000 40% 45200 Total 682000 86610 1 Bad debt expense 54400 =2720000*2%          Allowance for uncollectible accounts 54400 Allowance for uncollectible accounts 49000        Accounts receivable 49000 2 Bad debt expense 23210 =86610-(58000-49000+54400)          Allowance for uncollectible accounts 23210 3 Bad debt expense for 2018=54400+23210= $77610 4 Current assets: Accounts receivable 682000 Less: Allowance for uncollectible accounts 86610 Accounts receivable (net) 595390

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