At year-end (December 31), Chan Company estimates its bad debtsas 0.5% of its annual...

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Accounting

At year-end (December 31), Chan Company estimates its bad debtsas 0.5% of its annual credit sales of $975,000. Chan records itsBad Debts Expense for that estimate. On the following February 1,Chan decides that the $580 account of P. Park is uncollectible andwrites it off as a bad debt. On June 5, Park unexpectedly pays theamount previously written off.

Prepare the journal entries for these transactions.
Record the estimated bad debts expense.
Wrote off P. Park's account as uncollectible.
Reinstated Park's previously written off account.
Record the cash received on account.

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Allowance for doubtful account is created to credit the amount estimated to be uncollectible when the receivable is written off allowance for doubtful account is debited at that time See Answer

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In: AccountingAt year-end (December 31), Chan Company estimates its bad debtsas 0.5% of its annual credit...At year-end (December 31), Chan Company estimates its bad debtsas 0.5% of its annual credit sales of $975,000. Chan records itsBad Debts Expense for that estimate. On the following February 1,Chan decides that the $580 account of P. Park is uncollectible andwrites it off as a bad debt. On June 5, Park unexpectedly pays theamount previously written off.Prepare the journal entries for these transactions.Record the estimated bad debts expense.Wrote off P. Park's account as uncollectible.Reinstated Park's previously written off account.Record the cash received on account.