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Bad debts: ABC Company

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June 14th, 2023

ABC Company estimated its bad debts equal to 2.5% of its $850,000 credit sales for the year 2011. On December 31, 2011 ABC Company made an adjustment for the 2.5% amount. On July 1, 2012 the management decided that $2,000 account of Mary Smith was uncollectible and wrote it off using Allowance for Doubtful Accounts. On December 31, 2012 Mary Smith returned and paid her account in full. Please prepare the required four (4) journal entries for the above events. Each entry is worth five (5) points each.

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