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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
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 0.30% 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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