aTAND Assets SECTION 2 390 Connect Problems 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 vear-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 2020, accounts receivable were $574.000 and the allowance account had a credit balance of $54,000. Accounts receivable activity for 2021 was as follows: P 7-1 Uncollectible accounts; allowance method; income statement and onsl balance sheet $ 574,000 2,620,000 (2,483,000)oS (68,000) Beginning balance eusCt approach • LO7-5, LO7-6 IEadme Credit sales ober Collections Write-offs onta To pue Ending balance Elo 643,000 sd to The company's controller prepared the following aging summary of year-end accounts receivable: Summary 00e,ES 003,8 Percent Uncollectible Amount Age Group $430,000 4% 0-60 days 98,000 60,000 15 61-90 days 91-120 days 000.05 25 bnsl 55,000 40 Over 120 days $643,000 Total 000,30 COA CE 000 Required: 1. Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the vear 2. Prepare the necessary year-end adjusting entry for bad debt expense. 3. What is total bad debt expense for 2021? How would accounts receivable appear in the 2021 balance sheet? EMC Corporation manufactures large-scale, high-performance computer systems. In a recent annual report the balance sheet included the following information ($ in millions): P 7-2 Uncollectible accounts; EMC Corporation • LO7-5 2015 2014 Current assets: Receivables, less allowances of $90 in 2015 and $72 in 2014 $3,977 Real World Financials $4,413 ue of $24,704 ($ in millions) for the current year. All sales In addition, the income statement reported sales reven are made on a credit basis. The statement of cash flows indicates that cash collected from customers during the current year was $25,737 ($ in millions). There were no recoveries of accounts receivable previously written off. Required: 1. Compute the following ($ in millions): a. The amount of bad debts written off by EMC during 2015. b. The amount of bad debt expense that EMC included in its income statement for 2015 c. The approximate percentage that EMC used to estimate bad debts for 2015, assuming that it ueed et income statement approach o bovious 2. Suppose that EMC had used the direct write-off method to account for bad debts. Compute the followie c0 in millions):