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At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $746,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $373 account of P. Park is uncollectible and writes it off as a bad debt. On June 5. Park unexpectedly pays the amount previously written off.

At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $746,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $373 account of P. Park is uncollectible and writes it off as a bad debt. On June 5. Park unexpectedly pays the amount previously written off.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $746,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $373 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries for the transactions. View transaction list 1 Record the estimated bad debts expense. > 2 Wrote off P. Park's account as uncollectible. 3 Reinstated Park's previously written off account. 4 Record the cash received on account. Credit
Transcribed Image Text:At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $746,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $373 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries for the transactions. View transaction list 1 Record the estimated bad debts expense. > 2 Wrote off P. Park's account as uncollectible. 3 Reinstated Park's previously written off account. 4 Record the cash received on account. Credit
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