Refer to the data in PE 6-10. Assume that one customer, whose account had previously been written off, returned from exile in the Bahamas and paid his account of $7,000. Make the journal entry or entries necessary to record the receipt of this payment.
PE 6-10
The company had credit sales of $2,500,000 during the year, its first year of business. The company has estimated that $50,000 of these sales on account will ultimately be uncollectible. In addition, a year-end review of accounts identified that of the $200,000 in accounts outstanding as of the end of the year, $43,000 were worthless because the business customers associated with those accounts had gone bankrupt.