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:

Beginning balance $ 574,000
Credit sales 2,620,000
Collections (2,483,000)
Write-offs (68,000)
Ending balance $ 643,000
The company’s controller prepared the following aging summary of year-end accounts receivable:

Age Group Summary
Amount Percent Uncollectible
0–60 days $ 430,000 4%
61–90 days 98,000 15
91–120 days 60,000 25
Over 120 days 55,000 40
Total $ 643,000
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.

3-a. What is total bad debt expense for 2024?

3-b. How would accounts receivable appear in the 2024 balance sheet?