At December 31, 2017, Hawke Company reports the following results for its calendar year. Cash sales$1,244,790Credit sales3,700,000
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Question:
At December 31, 2017, Hawke Company reports the following results for its calendar year.
Cash sales$1,244,790Credit sales3,700,000
In addition, its unadjusted trial balance includes the following items.
Accounts receivable$1,121,100debitAllowance for doubtful accounts12,070debit
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.
rev: 06_11_2020_QC_CS-216062
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.
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