Answered step by step
Verified Expert Solution
Question
1 Approved Answer
At December 31, 2013, Hawke Company reports the following results for its calendar year. Cash sales $ 1,905,000 Credit sales 5,682,000 In addition, its unadjusted
At December 31, 2013, Hawke Company reports the following results for its calendar year. |
Cash sales | $ | 1,905,000 |
Credit sales | 5,682,000 | |
In addition, its unadjusted trial balance includes the following items. |
Accounts receivable | $ | 1,270,100 | debit |
Allowance for doubtful accounts | 16,580 | debit |
Required: | |
1. | Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions. |
a. | Bad debts are estimated to be 1.5% of credit sales. |
b. | Bad debts are estimated to be 1% of total sales. |
c. | An aging analysis estimates that 5% of year-end accounts receivable are uncollectible. |
Adjusting entries (all dated December 31, 2013).
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started