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At December 31, 2017, Hawke Company reports the following results for its calendar year. Cash sales $ 1,350,030 Credit sales 3,509,000 In addition, its unadjusted
At December 31, 2017, Hawke Company reports the following results for its calendar year.
Cash sales | $ | 1,350,030 | |
Credit sales | 3,509,000 | ||
In addition, its unadjusted trial balance includes the following items.
Accounts receivable | $ | 1,063,227 | debit |
Allowance for doubtful accounts | 23,020 | debit | |
Problem 7-2A Part 1
Required: 1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.
- Bad debts are estimated to be 2% of credit sales.
- Bad debts are estimated to be 1% of total sales.
- An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
Adjusting entries (all dated December 31, 2017).
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