ข้อ 4 (Estimation vs. Direct Wrote-Off of Bad Debts)
The Blue Company makes credit sales of $21,000 during the month of February 2012. During 2012 collections are received on February sales of $20,400, accounts representing $600 of these sales are written off as uncollectible, and a $100 account previously written off is collected.
Required
Prepare the journal entries necessary to record the preceding information if
1) Bad debts are estimated as 3% if sales at the time of sales, and
2) The bad debts are recorded as they actually occur.