Wasson, Inc. uses the allowance method to account for uncollectibles. On December 31, it had the following items in its unadjusted trial balance:

Debit Credit

Cash sales $ 88 000

Credit sales 208 000

Accounts receivable $ 102 000

Allowance for doubtful accounts 1 050

Part A:

Required: Prepare the adjusting entry to record the estimate of bad debts assuming the company estimates bad debts to be 10% of total credit sales.

Part B:

On March 1, management decided that the $1,000 account of J. Smith was uncollectible and wrote it off as a bad debt.

Required: Prepare the appropriate entry for March 1.

Part C: On August 15, J. Smith paid the amount previously written off. Required: Prepare the appropriate entry or entries for August 15.