Required information [The following information applies to the questions displayed below.] At year-end December 31, Chan Company estimates its bad debts as 0.40% of its annual credit sales of $682,000. Chan records its bad debts expense for that estimate. On the following February 1, Chan decides that the $341 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 to record the transactions of December 31, February 1, and June 5. View transaction list
Required information [The following information applies to the questions displayed below.] At year-end December 31, Chan Company estimates its bad debts as 0.40% of its annual credit sales of $682,000. Chan records its bad debts expense for that estimate. On the following February 1, Chan decides that the $341 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 to record the transactions of December 31, February 1, and June 5. View transaction list
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Do not give image format
![!
Required information
[The following information applies to the questions displayed below.]
At year-end December 31, Chan Company estimates its bad debts as 0.40% of its annual credit sales of $682,000. Chan
records its bad debts expense for that estimate. On the following February 1, Chan decides that the $341 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. (Leave no cells blank.)
December 31
February 1
June 5
Assets
Liabilities
Equity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a063afd-1328-45c9-8108-d6b0d29797d8%2F2b97dafa-31e4-4cd9-be62-16fc8c50e703%2Fm2z6ttk_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
At year-end December 31, Chan Company estimates its bad debts as 0.40% of its annual credit sales of $682,000. Chan
records its bad debts expense for that estimate. On the following February 1, Chan decides that the $341 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. (Leave no cells blank.)
December 31
February 1
June 5
Assets
Liabilities
Equity
![Required information
[The following information applies to the questions displayed below.]
At year-end December 31, Chan Company estimates its bad debts as 0.40% of its annual credit sales of $682,000. Chan
records its bad debts expense for that estimate. On the following February 1, Chan decides that the $341 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 to record the transactions of December 31, February 1, and June 5.
View transaction list
Journal entry worksheet
<
1
2
Date
December
31
3
Record the estimated bad debts expense.
Note: Enter debits before credits.
Record entry
4
General Journal
Clear entry
Debit
Credit
View general journal
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a063afd-1328-45c9-8108-d6b0d29797d8%2F2b97dafa-31e4-4cd9-be62-16fc8c50e703%2Fwuru9es_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
At year-end December 31, Chan Company estimates its bad debts as 0.40% of its annual credit sales of $682,000. Chan
records its bad debts expense for that estimate. On the following February 1, Chan decides that the $341 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 to record the transactions of December 31, February 1, and June 5.
View transaction list
Journal entry worksheet
<
1
2
Date
December
31
3
Record the estimated bad debts expense.
Note: Enter debits before credits.
Record entry
4
General Journal
Clear entry
Debit
Credit
View general journal
>
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