Exercise 7-6 Percent of sales method; writé-öft At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $862,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $431 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 Journal entry worksheet 1 <> Record the estimated bad debts expense. Note: Enter debits before credits. Debit Credit

Exercise 7-6 Percent of sales method; writé-öft At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $862,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $431 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 Journal entry worksheet 1 <> Record the estimated bad debts expense. Note: Enter debits before credits. Debit Credit

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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Percent of sales method At year-end, December 31, Ying Company estimates its bad debts as 0.5% of its annual credit sales of $975,000. Ying records its Bad Debts Expense for that estimate. 1. Prepare the journal entry to record bad debts. 2. Compute the ending balance of the Allowance for Doubtful Accounts if it has a $5,000 beginning credit balance.
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! Required information [The following information applies to the questions displayed below.] At year-end December 31, Chan Company estimates its bad debts as 0.30% of its annual credit sales of $812,000. Chan records its bad debts expense for that estimate. On the following February 1, Chan decides that the $406 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. Determine the impact of the December 31, February 1, and June 5 transactions on the accounting equation. For each transaction, indicate whether there would be an increase, decrease, or no effect, for Assets, Liabilities, and Equity. Note: Leave no cells blank. December 31 February 1 June 5 Assets Liabilities Equity
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