Exercise 7-6 percent of sales method; write-off lo p3 at year-end (december 31), chan company estimates its bad debts as 0.70% of its annual credit sales of $641,000. chan records its bad debts expense for that estimate. on the following february 1, chan decides that the $321 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.

Explanation:

The journal entries are shown below:

December 31

Bad debt expense A/c Dr $448,700         ( $641,000 × 0.70%)

  To Allowance for Doubtful debts  $448,700

(Being bad debt expense is recorded)

February 1

Allowance for Doubtful debts A/c Dr $321

   To Accounts receivable                              $321

(Being uncollectible amount is recorded)

June 5

Allowance for Doubtful debts A/c Dr $321

   To Accounts receivable                              $321

(Being uncollectible amount is recorded)

June 5

Cash A/c Dr  $321

    To Accounts receivable   $321

(Being previously written off recorded)

the answer to this question would be shared investment

consumer credit. an advantage is that it allows consumers to afford expensive goods and services now, increasing their standard of living. however, a disadvantage is that it creates a trap for debt, if people do not have self control, they may see themselves filing personal bankruptcy.