Exercise $9-10$

Percent of sales method; write$-$off

P$3$

At year$-$end December $31,$ Chan Company estimates its bad debts as $1\%$ of its annual

credit sales of $$487,500.$ Chan records its bad debts expense for that estimate. On

the following February $1,$ Chan decides that the $$580$ 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 to record the transactions of December $31,$ February

$1,$ and June $5.$