value: 4.30 points Exercise 7-4 Percent of sales method; write-off LO P2 At year

Question

value: 4.30 points Exercise 7-4 Percent of sales method; write-off LO P2 At year-end (December 31), Chan Company estimates its bad debts as 0.60% of its annual credit sales of $635,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $318 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 the journal entries for these transactions. View transaction list Journal entry worksheet 2 3 4 Record the estimated bad debts expense Note: Enter debits before credits. Date General Journal Debit Credit Dec 31 Record entry Clear entry View general journal

Explanation / Answer

Journal entry : Assuming allowance for doubtful accounts :

Date accounts & explanation debit credit Dec 31 Bad debt expense (635000*.60%) 3810 Allowance for doubtful accounts 3810 Feb 1 Allowance for doubtful accounts 318 Account receivable 318 June 5 Account receivable 318 Allowance for doubtful accounts 318 June 5 Cash 318 Account receivable 318

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